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...
- Asia PVC markets see longest rising streak ever on extreme tightness
- Africa polymers: October offers higher amid reduced availability
- Stable to softer PE trend prevails in Europe amid soft demand, poor netbacks
- Turkey’s PP and PE markets move up, but riddled with uncertainties
- India, SEA PVC markets unlikely to take respite from bullish run for November
- Southeast Asia PET markets move sideways during China’s absence
- Egypt’s import PE market up on tight supply, domestic offers follow suit
- Will European PS, ABS track divergent paths for another month?
- Turkey PP and PE regain premium over China, LDPE fails to make a sprint
- Strong netbacks and demand trigger exodus of PVC from China to export markets