Strong demand for LDPE from buyers in Southeast Asia

15-Oct-10
In Southeast Asia, traders and converters are actively searching the market for LDPE film cargoes this week, with buyers attributing rising LDPE demand to tight supplies within the region as well as the ongoing price increases being witnessed in Asian markets, as per Chemorbis. Chinese buyers are also said to be exhibiting healthy demand for LDPE film, with some Southeast Asian sellers electing to allocate their supplies to China rather than the regional market. Globally, LDPE supply remains limited as the new LDPE capacities are not coming up at the same rate as HDPE and LLDPE. In addition to this ongoing general tightness, shutdowns on the part of several Southeast Asian LDPE suppliers have intensified the regional shortage of this product. Titan Petrochemical shut down a 230,000 tpa LDPE plant in Malaysia for three weeks last week in accordance with a maintenance shutdown at the company’s upstream cracker. LDPE supply is also said to be quite restricted in Thailand, with several distributors commenting that they are unable to offer any LDPE cargoes to the local market due a lack of availability. Although Thai PTT has recently begun commercial operations at its new 300,000 tpa LDPE plant, players commented that another domestic LDPE film producer is not currently offering any material to the market and that supply has suffered accordingly. Regional supply woes have resulted in significant price increases in LDPE film prices in the Southeast Asian market, with LDPE prices rising at a faster rate than either HDPE or LLDPE film prices. Domestic producers in Malaysia announced a second October price hike of MYR200/ton (US$65/ton) this week on top of the MYR100/ton (US$32/ton) increases announced at the start of the month. Offers for locally-held LDPE film cargoes in Vietnam were largely unchanged this week after prices had recorded increases of US$76-273/ton in the prior week. In the import market, a major Southeast Asian producer announced their November offers for LDPE film to the region this week with increases of US$100/ton when compared with their October offer levels. In spite of the significant price increases being reported, sellers report that they are seeing better demand for LDPE when compared with HDPE and LLDPE demand. Traders in Vietnam report that they are actively searching the import market for attractive LDPE film cargoes this week while adding that they are in no rush to restock their LLDPE and HDPE stocks at the present.
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