SE Asia’s LDPE and HDPE film markets come at par after 3 years

Southeast Asia’s import HDPE and LDPE film prices have come at par for the first time since October 2019. As ChemOrbis Price Index data reveal, LDPE film has seen sharper drops compared to HDPE and LLDPE since it hit an 11-year high in March 2022. Hence its premium over the other film products has evaporated.

When compared to the peak in late March 2022, import LDPE film prices have lost around 40%. For the same of comparison, CIF SEA HDPE film prices are down only 25%, while LLDPE film is down by 28%.

As can be seen in the graph below, the LDPE-HDPE film gap hit an all-time high of $430/ton in December 2020, and the former carried a premium of more than $250/ton over the latter for about 20 straight months. The main reason LDPE film was traded with a significant premium was because it faced a deeper shortage of availability during that time amid pandemic-hit supply chains.



As the graph also shows, the gap between LDPE and HDPE film prices on CIF SEA basis has been gradually decreasing since July 2022. The weekly price averages of the two came at par as of last week after more than three years.

The price assessments of import LDPE film prices for all origins stood at $1030-1100/ton CIF Southeast Asia, cash last week. The range was down $20/ton from the previous week. On the other hand, import HDPE prices were assessed stable at $1040-1090/ton with the same terms.

As for the LDPE-LLDPE film gap, the former is still carrying a premium of about $30/ton over the latter. Back in December 2020, however, the gap was hovering at a record high of $475/ton, according to ChemOrbis data.

LDPE sees weaker demand, HD propped up by lower supply

Last week saw a softening trend in Southeast Asia’s import PE film markets continuing, except for the HDPE film grade which was underpinned by relatively lower supply levels. Demand towards LDPE, meanwhile, was the weakest among all film grades.

A source from a Middle Eastern PE producer explained, “LDPE film has seen larger drops since it sees much lower demand than the other film products.”

A Vietnam-based trader said the tight availability for HDPE grades had led to stability in import prices, while LDPE and LLDPE witnessed a further downslide last week. “Buyers expect to see further price reductions. We might see levels below the $1000/ton threshold if demand remains in doldrums,” he said.

Players mostly expect the current bearish sentiment across the Southeast Asian PE markets to persist with no discernible signs of a demand recovery amid ample supplies. And overall availability is expected to rise in April, including HDPE film, in line as several Middle Eastern producers get back on stream from the maintenance shutdowns.