More S. Korean PP, PE offers find way to SE Asia at competitive prices

Market participants in Southeast Asia reported an increasing number of competitive South Korea-origin offers for the past two weeks, putting extra pressure on prices. The import polyolefin markets in the region have been on a downward trend since around mid-October mainly due to weak regional demand, falling China polyolefin markets, as well as lack of cost support.

PP market already under pressure from Chinese offers

South Korean suppliers’ offers to Southeast Asia are generally forming the low ends and adding to the bearish sentiment in the regional PP markets, where Chinese offers have already been heaping pressure. Chinese suppliers have ramped up exports due to growing capacities at home, targeting Southeast Asia.

Chinese polypropylene has continued to be offered to buyers in the region, especially in Vietnam. “Prices are in the high $1100s/ton FOB China and at $1250/ton CIF Vietnam,” a trader said.

The overall range of homo-PP raffia prices was assessed $10/ton lower last week at $1170-1270/ton CIF SEA, cash basis, with offers from South Korea standing at $1180-1190/ton with similar terms.

A converter in Vietnam reported buying South Korea origin raffia at $1190/ton CIF and said, “We think prices still have room for further decreases to become more attractive and spur demand. We have bought some Korea origin offers but Chinese offers are at high levels considering shipping fees.”

Meanwhile, PPBC injection prices for all origins were also assessed $10/ton lower from last week at $1220-1300/ton CIF, cash basis. Within that range, South Korean offers were at $1220-1270/ton with similar terms.

More S. Korean offers emerge on low ends of PE ranges

A similar situation is seen in PE markets with more PE sellers preferring to focus on the Southeast Asian market to China.

A source from a Middle Eastern producer said, “South Korean sellers are not able to offer to China and can’t find vessels to ship to the EU. So they are offering at very low prices to Vietnam as they seek to clear inventories before the financial year-end. Russian material is also being offered to Southeast Asia as demand in China remains weak,” he added.

A Vietnamese trader said, “Middle East origin LDPE film offers were down by $80/ton from last month at $1510/ton CIF, but they were still not attractive enough due to lower South Korea origin offers.”

In Southeast Asia, HDPE film prices for all origins were down by $10/ton at $1200-1270/ton CIF SEA this week, with South Korea origin offers forming the low ends. Import LDPE film prices for all origins were assessed $30/ton lower at $1500-1600/ton on CIF SEA, cash basis and LLDPE film prices were stable to $20/ton lower from the previous week to $1220-1300/ton with similar terms.