LDPE prices gaining larger premium over other polyethylenes in SE Asia

Import LDPE film prices continued to firm up in Southeast Asia this week even as HDPE and LLDPE film prices began to stabilize ahead of the upcoming holidays, as per Chemorbis. Overall import offer ranges for both HDPE film and LLDPE film softened slightly following initially higher offers for next month, as buyers became increasingly hesitant to make fresh purchases ahead of the impending Chinese New Year holidays and some import sellers therefore conceded to discounts in order to conclude deals this week. Meanwhile, import offers for LDPE film continued to gain ground this week as more overseas producers announced increases on February offer levels and tight supply continued to limit buyers’ room to negotiate on prices. Two Southeast Asian producers announced their initial February offers this week with increases of US$50-70/ton when compared with January while distributors continued to express interest in new LDPE film offers given healthy demand from their local markets. The ongoing rise in LDPE film prices combined with the recent leveling off in HDPE and LLDPE film prices has pushed the premium on LDPE film prices to its highest level in the past year. In the region’s local markets, prices for all PE grades gained ground this week, although LDPE film prices posted relatively larger increases than HDPE and LLDPE film prices. Sources pointed to structurally limited availability for LDPE film as the main reason for the rising premium separating prices from HDPE and LLDPE film prices. Persistently tight availability for LDPE film has allowed LDPE film cargoes to remain in demand within the region even during periods when PE demand in general has been weak. The rising premium separating import LDPE film prices from import HDPE and LLDPE film prices has also helped local LDPE film prices in the region rise at a faster rate than the other products. Malaysian producers announced their initial February offers to the local market this week with increases of MYR20-60/ton (US$7-20/ton) for LLDPE film and rollovers to increases of MYR70/ton (US$23/ton) for HDPE film when compared with January while initial February offers for LDPE film were announced with larger increases of MYR100-160/ton (US$33-52/ton) from January. In the Philippines, distributors raised their offers for locally-held import cargoes by PHP1100/ton (US$25/ton) for HDPE film and by PHP1100-2200/ton (US$25-50/ton) for LLDPE film this week while offers for locally-held import LDPE film cargoes posted increases of PHP3300-4400/ton (US$74-99/ton) on the week.