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PE, PP bearishness to continue into January for SEA imports

by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
  • 22/12/2021 (09:36)
As Southeast Asian import prices of both PE and PP have been falling for the last two months, traders expect the bearishness to continue into January, with sellers continuing to notify more price cuts.

Players have reported a sizable number of competitive offers emerging from Southeast Asia, the Middle East and Northeast Asia. “The availability of Chinese PE and PP would also likely keep the polyolefin markets under pressure in January as China’s domestic and import markets remain weak,” a trader said.

In the latest week, a Southeast Asian producer notified January PP and PE prices to Indonesian buyers with reductions from December of $130/ton for homo-PP raffia, injection and film, $70/ton for PPRC grades, $120/ton for PPBC injection, and $100/ton for fibre, traders said. As for PE, it cut new offers by $70/ton for HDPE film, by $50/ton for HDPE blow molding, and by $40/ton for LDPE film and coating.

”Despite lowering prices, the response from our buyers has been lukewarm as offers stayed higher than market levels,” the producer told in the previous week, suggesting a more aggressive stance in pricing was warranted.

A Saudi Arabian producer also cut HDPE by $40/ton and LLDPE by $80/ton for January to Vietnam last week.

“As growing capacities and weak demand are closing the window of opportunity to China, South Korean sellers are offering at very low prices to Vietnam with the aim of clearing inventories before the financial year-end,” said a source at a Middle East producer. As an Asian destination not too far away, Vietnam may continue to see an influx of South Korean PE and PP next year too, traders said.

Some Vietnamese traders reported offers even below Middle Eastern levels from South Korea. Vietnam is the second largest buyer of South Korean PP and PE during January-October 2021, after China, with a yearly increase of 14-18% in imports.

“South Korean suppliers’ offers to Southeast Asia are generally forming the low ends and adding to the bearish sentiment in the regional PP markets,” a Southeast Asian trader said.

Some traders said there’s pressure on prices currently also because operators are paring down stocks to shore up their books. “We feel buyers will be back only after the Chinese New Year in early February. Till then the market may at best be range-bound,” a trader said.
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