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Players: Southeast Asia’s PE market facing downward pressure

by ChemOrbis Editorial Team -
  • 15/06/2012 (04:19)
Players in Southeast Asia’s PE market report that prices are facing downward pressure as most buyers are delaying their purchases whenever possible while upstream costs continue to move lower and regional supplies are said to be loosening. Buyers and distributors predict that local PE prices will be pulled lower by weakening regional trends while players active in the import market are placing buy and sell ideas at levels significantly below the prevailing offer levels.

To track weekly developments in Southeast Asia’s PE market see Southeast Asia/India PE Polymer Digest (For members only)

A converter in the Philippines expressed their buy ideas for HDPE and LDPE film with decreases of $30-50/ton when compared with the low ends of the prevailing offer ranges for both products. “We are not looking to purchase any additional cargoes for now as we have recently replenished some cargoes and believe that prices will witness further decreases over the near term. We are not interested in offers for locally-held cargoes for now as we find import prices to be more competitive,” the converter reported.

A Vietnamese converter placed their buy ideas for import HDPE film cargoes at prices $50-100/ton below the low end of the current offer range. “We think that import prices still have room to come down given the recent losses in spot ethylene prices,” the buyer commented. An Indonesian converter added, “We are sticking to the sidelines for now as we believe that lower upstream costs will pull prices downward in the coming weeks. The offers we received in the local market were steady this week but our suppliers also offered us some off-spec cargoes at more attractive prices.”

A distributor in Thailand reported that they left their offers unchanged this week even though their suppliers are attempting to implement price increases of around THB1000/ton ($32/ton). “Domestic producers lifted their prices but we are still offering at last week’s levels as we do not believe that buyers will accept any price increases at this time,” the distributor stated. A distributor in Malaysia added, “We left our prices unchanged this week. Trading activity is very slow as most buyers are sticking to the sidelines in anticipation of seeing further price reductions.”

An Indian distributor also predicted that prices would continue to move lower the near term. “Prices are stable for now but we believe that the market will see further reductions over the near term. We believe that prices will remain on a declining trend in July.”

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