PE prices in SE Asia to continue to decline amid weak demand, falling feedstock, growing stocks

17-Dec-14

Polyethylene (PE) prices are expected to decline further in the Southeast Asian spot market due to persistently weak demand, growing inventories and continuous drops in feedstock ethylene values, as per players in ICIS. Ethylene prices were assessed at US$1000-1050/ton CFR (cost & freight) SEAsia on 12 December, a drop of US$130/ton against the previous week. PE prices dropped to a new record low in 2014 by the week of 12 December: Low density polyethylene (LDPE) all origins prices were assessed at US$1200-1290/ton CFR SE Asia, a fall of US$85-115/ton from the previous week. LLDPE (linear low density polyethylene) all origins prices were assessed at US$1240-1350/ton CFR SE Asia, registering a drop of US$60/ton against last week, and HDPE (high density polyethylene) at US$1300-1400/ton CFR SE Asia, softening by US$50/ton compared to the previous week. Southeast Asian market players believe that the spread between PE resins vs ethylene prices remains wide, which should translate into further downtrend in PE spot prices. A very weak interest of buyers to stock cargoes at this period has led to growing inventories as resins have not been absorbed by the market for a number of weeks now, a trader to the Vietnam market said. Sellers are also under extreme pressure to offload cargoes as the year draws to a close. Most producers are expected to offer January-loading PE cargoes this week. Due to very bleak market outlook, trade of PE across southeast Asian markets has been limited as most traders remained on the sidelines amid a volatile market.