PE buyers in SE Asia expect to see softer prices in May

In Southeast Asia, PE players had mixed views in H1-April regarding the outlook for May. Material had been tight for some of the PE products in several of the countries, with some of the local producers working hard to clear backlogs, as per ChemOrbis. Spot ethylene prices had also been rising during April even as naphtha was falling. In fact, domestic PE prices were still being raised in some of the local markets through the middle of this month. The evolving market conditions reveal, however, that the outlook is not as firm as earlier in the month. During April, Southeast Asia has been subject to re-export offers out of China. The soft demand in China has pressured the sentiment in the South. Meanwhile, spot naphtha prices reached a two and a half low at the end of last week in Asia. Supply concerns regarding PE have eased, and demand continues to be affected by the macroeconomic conditions. Recently, more players have reported their expectations of softer market conditions in the month of May. Yesterday it was reported that a Southeast Asian producer rolled over its May LDPE offers. An agent for the producer commented, “Our supplier decided to rollover their offers for May cargoes because our prices were already at the top of the market range. However, they were not willing to lower their prices because of the high feedstock costs.” A source at an Indonesian producer said Monday, “We left our offers unchanged this week, but we are reducing our backlogs and supply is easing.” A plastic bag maker in Malaysia also said yesterday that they received a lower offer from their supplier for Saudi Arabian LLDPE, but he said, “Despite the lower offer, we prefer to monitor the market before making any further purchases.” On Friday of last week, players in Vietnam reported that distributors were encouraging buyers to purchase material by offering discounts if they conclude deals and they were also offering longer payment terms, as per ChemOrbis. The Vietnamese local market has been weaker than other local markets during April as it has been affected more keenly by conditions in China this month. There is also a holiday coming up in the country on April 30 and May 1. A packaging converter in the country said, “Many local distributors tried to encourage me to purchase LDPE and HDPE film grades by offering discounts of around $15/ton, plus they offered me flexible payment terms because they want to deplete their stocks. We decided not to purchase for now because our end demand is not good and we want to see how the slow demand in China and the weakening Vietnamese dong affects the market.” A maker of fishing nets and ropes in Vietnam told ChemOrbis that their business is good and they are satisfied with their sales performance, nonetheless, they are aware that overall demand is not very strong. A source at the company noted, “Distributors didn’t change their prices but they are willing to give discounts if we buy a large quantity, plus, they offered us 30 days deferred payment terms. We purchased a small amount to cover our needs.”
  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