Demand In Southeast Asia Market Remains Stagnant, Sustainability Of Current PE Price Trend Is Questioned
- Substantial changes in July shipment PE offers announced by Malaysian polyolefins producer
- Demand remains slow in general
- Local and import PE prices expected to remain firm, supported by firmer monomer cost
SSESSMENTS.COM was told that the demand in the Southeast Asia market remains stagnant, as such the sustainability of the current PE price trend is questioned. In Thailand, the offers for local PE cargoes across all grades from a local producer increased by THB500/ton ($16/ton) from last week due to a limited supply and strong monomer cost. However, some traders are offering local PE cargoes across all grades at THB500/ton ($16/ton) lower than the producer’s offers as they still have some stocks from previous procurement when the offers were lower and the quantity is limited. While a trader stated that the offers for local PE cargoes across all grades from the company’s end are kept stable from a week earlier as price increases will be ineffective unless the offers are acceptable by the buyers. Despite the movement, buyers are still showing cold responses, and done deals remain limited. In the Philippines, the local offers for HDPE Film and LLDPE Film C4 from the leading Philippines polyolefins producer are captured higher between PHP1,000-2,000/ton ($20-40/ton) compared to last week supported by the firm monomer prices. Sources added that the allocation is quite limited due to the container shortage as a lot of containers are still stranded in China port after the producer sold high volume of PE cargoes to China market at the end of last month. Meanwhile, in Malaysia, the offers for local PE cargoes across all grades were kept stable on a weekly comparison.
From the import market, July shipment offers for HDPE Film from a Malaysian polyolefins producer surfaced with hefty increases of $70/ton from June shipment’s level, stand at $850/ton. Sources revealed that done deals were achieved at $20/ton lower than the initial offer level. For import Thai HDPE Film cargoes, done deals were concluded also at $830/ton. While for US cargoes, the offers for both HDPE Film and LLDPE Film C4 are recorded between $790-800/ton, which is between $130-150/ton higher from last month. All offers on LC at sight, CIF Philippines Main Port basis. Although the offers are deemed attractive, buyers are hesitant due to the long lead time as it will take around three or four months for US cargoes to arrive in the Philippines. Sources added to SSESSMENTS.COM that regional LDPE Film cargoes are being offered to Thailand at $930-940/ton on LC at sight, CIF Thailand Main Port basis.
In general, PE demand in Southeast Asia is still considered slow despite the improvement recorded. As explained to SSESSMENTS.COM, the current uptrend in PE price is only supported by the limited allocation and firm monomer prices. Sources added that most buyers already have sufficient inventory on hand and some are covered for the next two or three months, hence, buyers are not in a rush in making purchases despite the strong upswing in PE prices. Meanwhile, in the Philippines, not all converters have resumed production activity as the lockdown in Metro Manila was just lifted as of June 1. As such, market players are questioning the sustainability of the current price trend without the actual demand to support. On the supply side, a Malaysian converter reported tightness in LLDPE Film C4 supply, however, there is no impact recorded towards the production. On the production sector, market sources informed that Thai PTT Public Company Ltd has already resumed production at the company’s HDPE plant with a capacity of 300,000 tons/year on June 8. While the old LLDPE plant with a capacity of 400,000 tons/year was shut on June 4 due to technical issues. To date, there is no detailed information yet regarding the start-up date.
Looking ahead, the majority of Southeast Asian market players opined to SSESSMENTS.COM that local and import PE prices will most likely remain firm in the near term citing from the limited supply and strong monomer prices. While for the demand, it is predicted to remain the same as the market is still in the middle of the recovery process.
Local/localized PE offers on cash/credit term, FD basis, excluding VAT (except in PHP term excluding 12% VAT)
| Origin | Product | Transaction Type | Currency | Offers/ton | Equivalent in USD/ton | Payment Term | Delivery Location |
|---|
| Malaysia | HDPE Film | Offer Received | MYR | 3,440 | 807 | 30 Days Credit Term | Malaysia |
| Malaysia | HDPE Film | Price List | MYR | 3,580 | 840 | 30 Days Credit Term | Malaysia |
| Philippines | HDPE Film | Offer Received | PHP | 52,000-53,000 | 929-947 | Cash In Advance | Philippines |
| Philippines | HDPE Film | Offer Received | PHP | 54,000 | 965 | 60 Days Credit Term | Philippines |
| Thailand | HDPE Film | Offer Given | THB | 28,000-29,000 | 897-929 | Cash In Advance | Thailand |
| Thailand | HDPE Film | Offer Received | THB | 29,500 | 945 | Cash In Advance | Thailand |
| Philippines | HDPE Pipe (PE 100) | Offer Received | PHP | 54,000-55,000 | 965-983 | Cash In Advance | Philippines |
| Malaysia | LDPE Film | Offer Received | MYR | 3,980 | 934 | 30 Days Credit Term | Malaysia |
| Malaysia | LDPE Film | Price List | MYR | 4,250 | 997 | 30 Days Credit Term | Malaysia |
| Malaysia | LDPE Film | Offer Received | THB | 31,500-32,000 | 1,009-1,025 | Cash In Advance | Thailand |
| Malaysia | LDPE Film | Offer Given | THB | 33,000-33,500 | 1,058-1,074 | Cash In Advance | Thailand |
| Thailand | LDPE Film | Offer Given | THB | 32,500-33,000 | 1,042-1,058 | Cash In Advance | Thailand |
| Thailand | LDPE Film | Offer Received | THB | 33,500-34,000 | 1,074-1,090 | Cash In Advance | Thailand |
| Malaysia | LLDPE Film C4 | Offer Received | MYR | 3,390 | 796 | 30 Days Credit Term | Malaysia |
| Philippines | LLDPE Film C4 | Offer Received | PHP | 52,000-53,000 | 929-947 | Cash In Advance | Philippines |
| Philippines | LLDPE Film C4 | Offer Received | PHP | 54,000 | 965 | 60 Days Credit Term | Philippines |
| Thailand | LLDPE Film C4 | Offer Given | THB | 28,000-29,000 | 897-929 | Cash In Advance | Thailand |
| Thailand | LLDPE Film C4 | Offer Received | THB | 29,500 | 945 | Cash In Advance | Thailand |
Import PE offers on LC at sight, CIF Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Country |
|---|
| Middle East | HDPE Film | Purchased | 790 | Malaysia |
| North America | HDPE Film | Offer Received | 790-800 | Philippines |
| Southeast Asia | HDPE Film | Offer Received | 850* | Philippines |
| Southeast Asia | HDPE Film | Purchased | 830* | Philippines |
| Southeast Asia | LDPE Film | Offer Given | 930-940 | Thailand |
| North America | LLDPE Film C4 | Offer Received | 790-800 | Philippines |
Description: *July shipment offers
Tags: Asia Pacific,English,PE,SEA,Weekly
Published on June 11, 2020 12:45 PM (GMT+8)
Last Updated on June 11, 2020 1:40 PM (GMT+8)
