Malaysian PE buyers prefer local material to imports ahead of Ramadan

According to some players, PE buyers in Malaysia have opted to make pre-Ramadan purchases from the domestic market due to the competitive prices offered by a local producer. Demand for imported material has remained sluggish.

Besides, the current depreciation of the local currency against the USD has emerged as another reason for buyers to prefer the domestic PE market, along with longer lead times of imported products.

“Overall demand remains subdued. Still, buyers prefer the domestic market to imports when they decide to cover their urgent needs. The local market is more attractive in terms of price levels and faster delivery times offered by local producers. Plus, import suppliers mostly sustain their firm stance due to high costs and tight Mid-Eastern supplies,” explained a trader.

A Middle Eastern producer informed that their offers to the country increased by $20/ton from last week for all PE grades to stand at $1050-1070/ton for HDPE film, $1030-1050/ton for LLDPE C4 film, and $1130-1150/ton for LDPE film, all on CIF Malaysia, cash basis.

A source from the producer noted that the customers’ responses were not positive as both local and import demand were stagnant due to the weak global economics. “Due to the upcoming Hari Raya, we expect demand to diminish further. We have reduced the volume we allocate for the spot market given our lower inventory levels. We will conduct a maintenance shutdown, so we plan to remain firm on our offers. Buying enthusiasm from contract buyers is still normal. However, even they request for flexibility in their monthly volumes as demand is not sufficient especially during the low season,” he commented.