SEA LLDPE market sees fresh hikes despite virus-hit sentiment across Asia
Relatively tighter LLDPE supply leads further hikes
In late January, several regional and overseas producers approached the region’s import markets with increases for February on the back of diminishing PE supply amid a series of shutdowns in the Middle East and Southeast Asia scheduled for the first quarter.
This week, LLDPE prices have witnessed a fresh round of gains although the overall sentiment in the Asian polyolefin markets has been hit by the unexpected coronavirus outbreak.
A source from a Middle Eastern producer reported that they lifted their LLDPE offers to Southeast Asia further by $20/ton this week by citing the aforementioned bullish factors. The producer’s HDPE film offers to the region, meanwhile, indicated rollovers.
An Indonesian producer also applied increases on its LLDPE film and inj. offers to its local market for the fifth consecutive week by IDR270,000-280,000/ton ($20-21/ton) while keeping its HDPE film offers steady.
A converter in the Philippines also reported that local PE offers were stable this week except for LLDPE film, which was up by PHP2000/ton ($39/ton) from pre-holiday levels.
Coronavirus hits China’s post-holiday scene
The virus that started in Wuhan by mid-January not only caused the extension of the Chinese New Year holiday but also transformed city centers into “ghost towns" due to plunging foot traffic.
Following this, May LLDPE futures on the Dalian Commodity Exchange settled notably lower in the first working day after the holiday due to high inventory pressure along with slow trading amid the virus-hit sentiment.
Demand for medical-use PE may be boosted in Asia by fears over coronavirus
Several Asian players have been reporting that raising concerns over the risk of coronavirus spread may boost demand for medical-use polymers, including syringes that are made of medical-grade LLDPE.
An Asian converter opined, “Market players are discussing whether the growing need for medical-use polymers will trigger demand for PP and PE products as well as some other polymers in the days to come.”
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