Mid-Eastern PE sees additional declines in May

The global trend is downwards for PE as demand is lackluster partly because ethylene costs have slumped due to plummeting energy prices in major markets, as per ChemOrbis. Accordingly, sellers of Middle Eastern origins have surrendered to additional declines on their PE prices during May in several spot PE markets around the world. In Turkey, a Middle Eastern producer who approached the market with US$110-130/ton decreases for May LDPE offers said, “We have decided to withhold our LDPE offers for now as we cannot give away further declines.” Instead, they have applied a $10-30/ton decrease for LLDPE on top of the US$20-35/ton decreases initially announced. A distributor also reported receiving competitive HDPE and LLDPE film offers for a Saudi Arabian origin standing at least US$40/ton below the next lowest Middle Eastern price. Other Saudi Arabian producers that came with initial price declines ranging from US$30/ton to US$50/ton are also widely expected to reveal their new offers with additional discounts soon. In Egypt, Middle Eastern producers’ PE offers for May have seen further downward revisions as well. A buyer reported purchasing some Middle Eastern LDPE film paying US$70/ton lower than offers from last week and US$90/ton below the producer’s initial May prices. He also bought some HDPE film with US$20-40/ton decreases from last week while his purchase was US$60/ton lower than the producer’s initial May offers. “Our end product demand is slightly better than last week but it is still very sluggish,” the buyer complained. After a different Middle Eastern producer also followed suit and decided to lower its HDPE film prices by US$60/ton from its initial May levels, a buyer told ChemOrbis, “The producer is open to negotiations on deals as they fear that prices might continue to move lower next month.” In Italy, PE offers for Middle Eastern origins have emerged at competitive prices this week. A trader commented, “We had already lowered our PE offers in early May; however, we have had to apply larger decreases as the sentiment cooled down further after the Plast 2012 fair. Nevertheless, buyers are still bidding for further discounts.”A packaging manufacturer noted, “We asked for an additional €30/ton decrease for Middle Eastern LLDPE from a seller. Although he agreed, we are not interested in buying this month as we expect to see additional price cuts in June.” When looking at the Asian markets, Middle Eastern PE offers continue to post weekly losses in line with the overall trend. A producer from the region first applied a US$40-50/ton decrease for HDPE and LLDPE film offers, which have been followed by further decreases of US$30-50/ton in the later days, as per ChemOrbis. “Despite these large price cuts, we are still not seeing any interest,” a source from the producer commented. “We have also decided to suspend our LLDPE sales as we don’t want to give into very low prices so quickly,” he also added. Middle Eastern PE cargoes from traders are also offered lower this week with overall HDPE and LLDPE film ranges recording $50/ton decreases on the week. In Southeast Asia, several traders in Vietnam reported receiving PE prices from Middle Eastern sources with US$10-50/ton reductions this week. A distributor commented, “It seems difficult to attract buy interest and conclude deals these days even with additional price cuts, because converters are still in a waiting stance as they believe that the downward trend is not likely to end soon."