PP, PE price decreases revealed for March in Indonesia, Malaysia

27-Feb-14

Regional producers have started to reveal their PP and PE offers to Southeast Asia for March both in the local and import markets, as per ChemOrbis. Players in the region reported that domestic producers in Indonesia and Malaysia either have lowered their prices or are considered likely to reduce their offers given disappointing demand. An Indonesian producer is seeking US$20/ton lower prices on the week for PP and PE in the local market. The distribution market followed suit in Indonesia. A distributor in Jakarta said, “The local market remains quiet this week. PP demand is relatively better than PE as supply for PP is balanced and there are not many imported cargoes in the distribution market due to the previously high import prices. In the case of PE, local producers are not running with high operating rates but supply is still higher than demand.” In Malaysia, a Southeast Asian producer made a larger decrease of US$50/ton on PP and PE to its local customers, according to players. “This price decrease of the regional producer has dampened the market sentiment. Now that the local currency is stronger, domestic producers are no longer in a position to ask for price increases,” argued a trader. Some players expect to see new prices from domestic producers, who have yet to reveal their offers for March, with decreases. As for imports, price decreases persist, according to players’ reports. Following the US$30/ton decrease of a regional producer last week, a Thai producer approached the regional markets with a US$10/ton discount this week. “This is in line with the softening in the Chinese market. We are already receiving good demand from Vietnamese buyers while there are only inquiries from Malaysia. When it comes to Indonesia, it is slower than other markets,” a producer source commented. According to ChemOrbis, looking ahead, the producer source does not think further decreases are possible. “Most producers do not have any sales pressure now, particularly for PP. There are also scheduled and unscheduled maintenance shutdowns in upstream markets, which is causing supply concerns. This may hinder possible further decreases as well, according to the source.