SE Asia’s import PE film markets see first price hikes since October

Southeast Asia’s import PE film markets witnessed their first price increases since October this week. Producers attempted to raise prices amid reduced availability, both regionally and from the Middle East, alongside higher crude oil costs. This came despite persistent demand weakness from downstream buyers.

Long-awaited recovery in PE film prices

According to ChemOrbis Price Index data, the region’s PE film markets have reversed their downward trend for the first time in months. Weekly average prices for LDPE film rebounded from their lowest levels since early May, while LLDPE film prices recovered from over one-year lows. Similarly, HDPE film prices rose from their lowest midpoint since July 2020.

The latest assessments showed LDPE film prices increasing by $20/ton, while HDPE film prices climbed $10-20/ton compared to the previous week. LLDPE film prices were assessed as stable to $20/ton higher.

Players attributed these hikes to supply reductions as well as rising costs driven by sharply higher crude oil prices and ongoing concerns over producers’ profit margins.

Lower allocations from ME

On the supply side, players noted reduced allocation from some major Middle Eastern producers as a key factor in the price increases. However, buyers have largely remained cautious, reflecting low demand for their end-products.

“Some buyers have concerns over a potential uptrend after the Chinese New Year, especially for the LLDPE film grade. So, demand for LLDPE is better now compared to other polymers, and this has encouraged some hikes from a major Middle Eastern producer. On the other hand, Malaysian import offers are lower than last month, as they couldn’t sell out their stocks earlier. Deal levels for Malaysian offers remain unchanged, though large-volume buyers might negotiate extra discounts,” opined a Vietnamese trader.

Another Vietnamese trader also pointed to reduced allocation from the major Middle Eastern producer due to reported force majors at their four plants. “LLDPE supply is especially tight, and we haven’t heard about their return to normal operations,” noted the trader. However, the trader added that the major producer’s prices are too high to accept. “We’re sourcing from sellers of other origins, re-export resources, or domestic suppliers to cover shortages.”

Meanwhile, in Vietnam and Malaysia, some major PE producers are undergoing shutdowns also affecting supplies to the region.

Demand weakness puts counter-pressure on bullish factors

Overall demand in the region remains subdued, with buyers limiting purchases to immediate needs. A source from a Malaysian producer noted low trading activity: “It’s difficult to raise prices as buyers are highly resistant. They’re not rushing to build inventories, and their customers are placing fewer orders than before. Leftover materials from year-end purchases are adding to the caution. Even though prices are quoted higher, there’s little interest in buying ahead.”

The source also mentioned that their LDPE production line had returned to normal rates after a disruption last month.

A Singaporean trader commented, “Regional demand is thin, and converters are holding back purchases. There’s a standoff between producers and buyers, so it may take time for prices to climb significantly again.” Another Singaporean trader added, “Downstream buyers are still reluctant to build inventories, and factory operating rates remain low. Prices are likely to remain in the current range for now.”