Initial August PE prices rise in SE Asia, China likely to follow

22-Jul-11
Southeast Asian PE producers announced initial August prices for LDPE film and HDPE film to their regional markets with increases in the latter part of this week, feeding speculation that overseas producers will also attempt August increases to China, as per ChemOrbis. As significant increases have been seen in the Chinese market over the past two weeks, most players do not expect increases in China to be as large as those to Southeast Asia. Import PE prices in the Chinese market were stable to slightly firmer this week following two consecutive weeks of significant price increases. Converters have begun to show renewed resistance to higher prices following the most recent hikes, with some buyers stating that the expected seasonal up-tick in demand from the start of the agricultural film season will not be strong enough to support any further price increases. Converters are trying to reduce purchasing amounts where possible as they struggle to pass on rising raw material costs to their end product prices. Trading activity in China was said to be limited this week as most players await new August prices before making their next move, with several traders only giving offers in response to requests from customers. Although no August offers have been reported yet, a Thai producer expressed their August sell ideas for HDPE film at a price US$30/ton higher than the upper end of the current import HDPE film range. In Southeast Asia, regional producers announced their initial August offers this week with increases of US$50-100/ton for LDPE film and US$80-90/ton for HDPE film when compared with their late July prices. Meanwhile, a converter reported to have received a new offer for HDPE film from a Saudi Arabian producer this week with a price increase of US$40/ton from the most recent offer level they received. Producers attributed their price increases to healthy demand from buyers in the region as well as comparatively limited supply. Both converters and traders in the region are said to be actively replenishing stocks after a prolonged period of limited purchasing left players across the region with reduced stock levels. In addition to an up-tick in demand from the agricultural film season, traders in Vietnam also report that HDPE demand is picking up in that country in accordance with the start of the fishing line and net season.
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