Mid-Eastern LL, HD offers soften further in SEA; LDPE maintains its 2-year high

Middle Eastern LLDPE and HDPE film prices in Southeast Asia have continued to soften, as several major plants across the Middle East and Asia restarted from their maintenance shutdowns, leading to an incremental increase in supplies across the region.

According to ChemOrbis Price Index data, LDPE film prices from Middle Eastern suppliers were kept stable at their 2-year highs in the third consecutive week. HDPE film prices for the same origin resumed drops after a week of stability, while LLDPE film prices extended losses into the second week.

In the current week, Middle Eastern HDPE film was assessed stable to $20/ton lower at $1010-1040/ton while LLDPE film prices were stable to $10/ton lower compared to the previous week to be assessed at $1020-1040/ton, both on CIF SEA, cash basis. On the other hand, LDPE film was assessed stable from last week at $1240-1300/ton with the same terms.



Persistently subdued demand exerts pressure

On the demand side, despite some recovery in Southeast Asian economies, it has not been sufficient to boost the demand and consumption of consumer goods produced from polymers. “Demand recovery has been challenging with the earlier sharp hikes. Besides, soaring freight rates have made it difficult for converters to ship their finished products, which has led to further cuts in restocking raw materials like PP and PE,” commented a source from a Saudi Arabian producer. Converters anticipate price corrections in August due to weak demand and increasing supplies. However, global container freight rates remain high and may prop up polymer markets and keep discounts in check. “In addition to these factors, demand in Southeast Asia also continues to be hit by the strong US dollar against local currencies,” added the source.

Near-term outlook is bearish

Downstream players are hopeful that the increase in supplies will lead to a downward price correction and provide them with an opportunity to restock at lower prices. “We will continue to monitor the buyers’ response towards recent discounts and adjust our offer levels accordingly,” commented a source from a Middle Eastern producer.

A Singaporean trader also pointed to the increasing imbalance between supply and demand conditions, saying: “We expect prices to be traded lower or at range for the near term.”