SEA PE market remains under pressure from flood of competitive US offers
Rising supplies from the US, along with growing fears of a global recession as well as tumbling currencies, have been weighing on the buying sentiment across the region and prompting sellers to reduce their offer levels.
US PE continues to offer competitive edge
Thanks to their cost advantage stemming from cheap shale-gas, US producers are able to maintain a competitive presence in Southeast Asia, with their prices constituting the low ends of the overall PE ranges.
According to ChemOrbis Price Index, the weekly average of US HDPE prices on CIF SEA basis has been mostly traded around $40-50/ton below Middle Eastern prices for the past one year. A similar picture can be seen in the region’s LLDPE market.
A trader in Vietnam commented, “PE prices are likely to remain soft as US supplies of HDPE and LLDPE are expected to be plentiful and priced to sell as they look to divert cargoes from China amid the trade tension. LDPE, which had escaped Chinese import duties earlier, may also come under scrutiny if the trade war resumes after the Christmas season.”
New capacities boost PE exports from US
Given the new capacities coming online in the US, PE exports from the country are highly likely to continue finding their way to Southeast Asia to an increasing degree, suggesting an additional pressure on the regional markets.
“Attractive offers from the US continue to show up in Southeast Asia amid the major capacity expansions and new capacities. Despite its long shipment duration, several buyers prefer US cargoes thanks to their competitive prices,” a regional player opined.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- Will Saudi cutbacks cause jitters in Europe’s PE market?
- Turkey’s stormy week: Hike attempts emerge after 4 months in PP, PE markets
- PVC markets fail to extend gains to Oct on economic woes, low demand in Asia
- Sentiment cautiously rebounds in Asian PP, PE markets
- Asian monomer markets react after crude oil surge
- September hikes meet resistance for ABS in Europe
- Turkey’s import PP market slumps to 3-year low on supply glut, low demand
- Import PVC demand dampened in Europe, Turkey; will it improve in H2?
- Chinese PET producers attempt for hikes first time since July
- Uptrend in spot styrene prices curtailed in Asia