Gap between LLDPE, HDPE film disappearing in SEA

The gap between HDPE film from LLDPE film prices in Southeast Asia has narrowed considerably over the past few weeks, with the two currently trading almost at par with each other, as per Chemorbis. Comparatively better demand for HDPE film, high LLDPE film stocks in China dampening demand, and the high season for agricultural film that has passed, have helped narrow the gap. Prices have also found support from the recent uptrend in upstream costs that has exerted greater upward pressure on HDPE film prices than on LDPE/LLDPE film prices as HDPE film prices had been trading well below the other products at the start of the current upward movement in costs. Southeast Asian players have been closely following developments in the Chinese market as poor demand inside China has resulted in a steady inflow of re-export offers from Chinese traders, with some Chinese origins also appearing in Southeast Asia’s import market over the past few weeks. Re-export offers for both HDPE and LLDPE film were received from China once again this week, although sources inside China report that the country’s LLDPE film stocks are comparatively higher than the country’s HDPE film stocks and that traders are under more pressure to sell their LLDPE film materials for now. Based on data from ChemOrbis Price Wizard, LLDPE film prices on a CIF SEA, cash equivalent basis were carrying a premium of around US$35-80/ton over HDPE film prices in the first few weeks after the Chinese New Year holidays in February. This gap began to close towards the end of March and for the past two weeks, the two products have been trading virtually at par with each other. This week, import offers for HDPE film posted increases of US$30-40/ton as low end offers began to disappear from the market in the face of steadily climbing upstream costs. Meanwhile, import LLDPE film prices slipped $20/ton on the lower end of the range as a Chinese trader entered the market with re-export offers for Nigerian LLDPE film at competitive prices. Although their offers constituted the low end of the overall import range, the trader offering these materials complained that their offers have not met with much interest from buyers yet.
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