Mid-Eastern suppliers cut PP, PE prices in SEA on low demand, high competition

As bearish sentiment prevailed in Southeast Asia’s PP and PE markets amid persistent demand weakness and intensifying competition, most Middle Eastern suppliers opted to close September on a softer note, trimming offers by $10-20/ton. The reductions marked the second consecutive week of declines in PE, while PP extended its prolonged downtrend.

ChemOrbis Price Index data showed that PP prices have been on a relentless slide since late March, with the current weekly average sinking to the lowest level in more than five years. PE film grades had experienced some brief rebounds earlier, but the latest cuts dragged LDPE and HDPE film to three-month lows, while LLDPE film slipped to its weakest level since mid-July 2023.

Sluggish demand sets the market tone

Demand weakness remained the defining factor across the region’s polyolefin markets, with downstream sectors continuing to underperform. A Singaporean trader commented, “Supply-demand fundamentals remain fragile, as downstream markets for finished products continue to struggle to gain traction.” This sentiment was echoed widely, with converters describing demand as “very bad” and worse than last year, underscoring the structural slowdown in consumption.

The typical year-end order flow has yet to materialize. A Vietnamese converter said, “Normally, year-end demand should start to pick up around this time, but we haven’t seen any real improvement yet. We think prices could fall further, so we prefer to wait and see,” highlighting the absence of seasonal restocking.

Adding to the scene, many buyers prioritized liquidity management in a fragile macroeconomic climate, with another trader noting, “Buyers are only replenishing minimum replacement inventories and are preserving cash for future needs.”

Market participants consistently reported that buyers were replenishing only on a need basis. Another Vietnamese converter explained that while he used to purchase three to six months in advance, his procurement strategy changed. He said, “Currently, we only buy on a monthly or even weekly basis, keeping inventories at a minimum.”

Heating competition adds another layer of pressure

Competition intensified as Middle Eastern producers faced pressure from multiple origins. Prices for homo-PP raffia and inj. from the Middle East were last assessed at $840-860/ton CIF SEA, cash, with the low end of the range matching South Korean offers. Although Chinese-origin cargoes still carried a $10/ton premium, the country’s ample supply and lack of domestic recovery raised anticipations that Chinese sellers may redirect material into nearby Southeast Asia, further amplifying the competitive landscape.

The PE market, meanwhile, saw a growing influx of competitively priced US cargoes, significantly dampening prices in the region. According to weekly average data from ChemOrbis Price Index, Middle Eastern LDPE and HDPE film prices have maintained a significant premium over US-origin cargoes since late April, standing at $65/ton and $45/ton, respectively. As US suppliers increasingly target the LLDPE segment, the price gap between US and Middle Eastern levels has widened sharply to $70/ton—more than double the spread observed in previous months. At the same time, Vietnam’s Long Son complex returned to the market with a competitive stance, further weighing on regional supply.

Furthermore, domestic markets across Southeast Asia remained mired in weakness, making imports less appealing. Local prices continued to slide in key markets, with a Vietnamese trader saying, “PE and PP markets in Vietnam are still under a downtrend.” Currency depreciation against the US dollar further eroded the buying appetite for imports, prompting buyers to rely more on local supply for their limited needs to minimize FX risks.