Middle Eastern producers start to reveal new PE offers for September

Global PE markets have been on a steady decreasing trend for the past two months, according to ChemOrbis. The bearish trend seems to be continuing into the next month - evident with initial September PE prices announced lower, as expected, due to several factors such as sharply falling crude oil costs and globally slower economic data. Nymex crude futures settled below US$40/barrel for the first time in over 6 years on Monday. According to ChemOrbis Price Index, average weekly crude oil prices plummeted 35% during the period. The recent lows exacerbated the losses in spot ethylene costs, which touched US$900/ton CFR Northeast Asia on Tuesday. Spot naphtha prices were down by around US$50/ton week over week on CFR Japan basis, plunging to the US$400/ton threshold on Monday. A Middle Eastern PE producer announced new September offers with reductions of US$120/ton for HDPE and US$140/ton for LLDPE when compared to August in the Southeast Asian market. A source from the producer highlighted, “Demand is likely to remain weak for September. Southeast Asian suppliers are gaining more competitive power against Middle Eastern sources due to lower naphtha costs. We hope the market will recover in October with help from several turnarounds in the region.” A converter in Malaysia reported receiving fresh HDPE and LLDPE film prices from a different Middle Eastern supplier. “Although the producer cut their prices to below US$1200/ton CFR, we are not satisfied with the drop considering current spot naphtha and ethylene prices.” Malaysian buyers are concerned about the depreciation of the Malaysian ringgit and keep their purchases reduced. A trader in Singapore, meanwhile, reported, “A Middle Eastern producer announced its September PE prices early this week but withdrew as they were probably found unworkable. New offers may be delayed for a couple of days due to gradual losses in energy markets and economic developments in China where players were shaken by a steep fall in the stock market on Monday.” A trader in Vietnam expects to hear new Middle Eastern PE prices from his supplier at or below the US$1200/ton threshold, justifying his opinion with slow trading activity. “Buyers are only purchasing small volumes. Prices may continue to move down until year end before rebounding afterwards,” he argued. Overall, Asian players are not willing to import material at current price levels as they are not confident about the future outlook. “The bearish upstream chain, lower yuan and poor demand keep players sidelined to monitor developments,” players report Looking at other fresh offers, a Middle Eastern PE producer initially approached Turkey with new prices on Tuesday. The producer’s most recent offers indicate decreases of US$30-50/ton for LLDPE, US$20-40/ton for LDPE and US$30/ton for HDPE film from its last August levels as per ChemOrbis pricing service. “We are facing resistance from buyers towards our PE prices. Prices will probably reach the US$1200/ton level soon,” a producer source admitted
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha