Local PP, PE prices start moving south in line with lower import prices in SE Asia

In Southeast Asia, local PP and PE prices have started to move lower this week as sellers have come under increasing pressure to reduce their prices in response to steadily sliding import prices, as per ChemOrbis. Demand is said to be sluggish throughout the region in line with widespread concerns regarding the overall health of the global economy. Demand has been particularly slow in Thailand over the past few weeks as the ongoing floods in that country have severely disrupted economic activity and most buyers are unwilling to risk moving additional cargoes into their warehouses before the flood waters recede. In Thailand, domestic PE declined by THB500-2000/ton (US$16-65/ton) for LDPE film and by THB500-1000/ton (US$16-32/ton) for LLDPE and HDPE film this week. Distributors pointed to bearish sentiment from the nearby China market as well as a lack of buying interest stemming from the ongoing flooding within the country as the main reasons for their price reductions. Distributors commented that they are willing to negotiate with buyers placing firm bids. In Indonesia, domestic homo-PP injection and raffia prices have declined by US$45-70/ton over the past week while domestic PP film prices have lost US$55-110/ton week over week. An Indonesian producer lowered their homo-PP prices to the domestic market by US$35-55/ton at the start of the week and distributors are currently offering with discounts of as much as US$55/ton from the producer price level. A few converters reported purchasing homo-PP injection and raffia from the distribution market at prices equal to the low end of the current offer range, with the buyers commenting that they are not looking to purchase beyond their needs for now as demand for their end products is slow and they expect to see further price declines in the import market in the coming weeks. In Malaysia, converters reported receiving price reductions of MYR50-130/ton (US$16-42/ton) for HDPE film, MYR190/ton (US$61/ton) for LDPE film, MYR100-220/ton (US$32-70/ton) for LLDPE and MYR130/ton (US$42/ton) for PP film this week when compared with the initial October offer levels for domestic cargoes. A few converters reported concluding some deals for small amounts of LDPE film and HDPE film at the new price levels while adding that they are not interested in purchasing beyond their needs for now as they expect to see further decreases in the weeks ahead. In the Philippines, converters reported receiving new offers for locally-held cargoes with price decreases of PHP2200/ton (US$51/ton) for homo-PP and LLDPE film, PHP1100-2200/ton (US$25-51/ton) for LDPE film and PHP1100/ton (US$25/ton) for HDPE film when compared with the previous week. The converters who received these offers reported that they are not planning to make any fresh purchases for now as they expect to see additional declines in import prices over the near term, adding that demand for their end products is not very encouraging these days. Sentiment in the domestic PP market was also impacted by the recent restart of Philippine Polypropylene’s 160,000 tpa PP plant, which had been idle for several years prior to the restart.