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Polymer demand cautiously recovers in SE Asia amid hopes over easing restrictions

by Pınar Polat - ppolat@chemorbis.com
  • 22/09/2021 (10:25)
Southeast Asia has been one of the most vulnerable regions in the world to the Delta variant of Covid-19. After consecutive rounds of lockdowns amid slow vaccination rates and the public fatigue of restrictions, regional nations are nowadays aiming to balance the control of the virus and the battle with Covid’s economic fallout.

In light of the reopening plans, signs of a slight recovery in the regional countries’ demand for polymers have been reported since last week. Players have started to voice that they have seen the light at the end of the tunnel recently, pointing to some cautious improvement in market activity.

Operating rates at downstream plants slightly up

A regional PP and PE trader said converters have started increasing operating rates at their plants.

“We’ve been told some plants have raised run rates from 30% to above 50%,” an Indonesian seller said. “But a full recovery may be a prolonged process as most buyers are not budging yet,” he added.

A Thai trader also noted, “There was some hope that governments may start easing COVID-19 restrictions possibly by next month which have resulted in some domestic buying.”

Suppliers stay firm on offers in anticipation of seeing better demand

A source from a Middle Eastern PE supplier reported that they hiked new offers by $20-30/ton to regional markets to $1180-1200/ton for HDPE film, $1240/ton for LLDPE film, and $1500/ton for LDPE film, all on CIF, cash.

“Buying interest in Southeast Asia has been under the pressure of measurements taken to contain the spread of the Delta variant in the past few months. However, buyers have started to replenish back recently, particularly for contract purchases,” he noted.

A Malaysian PP, PE producer reported running their plants at full rates. “We expect to see a demand improvement particularly in Malaysia, where more economic sectors are allowed to reopen,” he said.

In Vietnam, a PVC converter reported purchasing Japanese origin cargoes at $1420/ton CIF, cash basis. “We are running our plants at around 30% capacity only. But we still bought around 2000 tons of PVC this month, which doubled compared to last month as a preparation for the upcoming high season. We expect the Vietnamese government to ease the lockdown soon,” he commented.
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