SEA’s PE market ends June on firmer ground; July outlook uncertain

PE markets across Southeast Asia wrapped up June on a firmer note, with import prices increasing visibly following months of downtrend. The rebound was largely attributed to earlier increases in oil futures and high freight rates, while supply tightness in certain grades also lent support. Sellers, particularly from the Middle East, appeared to factor in the possibility of renewed geopolitical tensions and supply disruptions when announcing their July offers.

Nevertheless, the recent sharp downturn in crude oil, combined with lingering sluggish demand, has cast a shadow over the outlook, raising questions about whether this uptrend can be sustained in the upcoming month.

Upstream support spurs higher import prices

Over the week ending June 27, import PE prices in the region saw a noticeable recovery. This marked the first increase since March for LDPE and LLDPE film prices and since February for HDPE film, according to ChemOrbis Price Index. While some Middle Eastern producers announced increases in their July price lists, prices for US cargoes also moved higher, though remaining relatively low compared to other origins.



Sellers applied hikes of up to $60/ton for Middle Eastern PE film offers, pushing LDPE film to $1090-1150/ton, LLDPE film to $940-990/ton, and HDPE film to $920-960/ton on a CIF SEA, cash basis. These firmer offers were issued despite generally weak demand, as sellers sought to pass on rising production and logistics costs, not to mention a lack of oversupply pressure.

A source from a Middle Eastern producer noted, “Prices are slightly up—around $10-20/ton—compared to last month, primarily due to higher costs. Our allocations are limited due to a plant shutdown. Supply for LLDPE and HDPE has tightened somewhat, boosting demand in Malaysia and Indonesia, although Vietnam’s demand remains weak.”

While some regional buyers resumed replenishment amid expectations of further increases, most remained cautious. A Vietnamese converter shared, “Import offers are firm, about $20/ton higher than last month. We’re concerned about further increases, so we’ve replenished some stocks. Still, we’re only making small purchases since our end-product demand remains soft, especially with new tax policies kicking in.”

Local markets largely mirror import gains

Local PE markets across the region also reflected a similar pattern, though the extent of the gains varied. Thailand saw price increases for HDPE and LLDPE, with one local converter reporting gains of THB500/ton ($15/ton) for both grades.

In Indonesia, some converters reported that they had purchased at lower levels in the previous week but were staying sidelined as prices continued to rise. One of them noted, “We purchased some cargoes last week at lower prices. As sellers continue to raise offers this week, we’ve decided to hold back. Demand for our finished products remains stable.”

Local prices in Vietnam experienced rollovers to slight increases, while Malaysia’s domestic market mainly stabilized over the past four weeks. A Malaysian trader noted, “Demand has slightly improved following the rise in crude oil prices. The recent sales and service tax policies may have some impact, but buyers are still restocking a bit more at this point.”

Uncertain path ahead

Despite signs of slight improvement in buying interest amid increased PE prices, most buyers have remained hesitant to make large purchases, wary of the uncertain market direction. “We still prefer to buy on a need basis, as the market is unstable and unpredictable,” a Vietnamese trader shared. “Demand isn’t very good, especially after crude oil dropped sharply this week. Buyers are cautious and prefer to stay on the sidelines,” he added.

Indeed, the recent plunge in crude oil prices has shifted sentiment once again, weakening the earlier momentum, mainly driven by upstream cost support. Another Vietnamese trader commented, “Initially, we expected prices to keep rising through July or even August. But with the current volatility, the outlook is uncertain. Demand has slowed after the oil price collapse, and there are still plenty of US-origin cargoes available at low prices. Thus, we’re buying only as needed and maintaining minimal inventories.”