Slack markets trigger three digit drop in LDPE and LLDPE prices in Asia

27-Oct-08

Pressured by persistently slackening demand and bearish market sentiments, prices of LDPE and LLDPE in Asia toppled by almost US$150 this week. Incessantly falling naphtha and ethylene values have also added to market woes. Ethylene prices peaked above US$1650/MT in Asia in July 2008; dropped to US$1250/MT in the week of September 8, 2008, and currently hover around US$600/MT. CFR China offers from Malaysia and South Korea for November shipment for LDPE fell to US$1200-1250/MT. Speculative CFR China offers for November shipment for LLDPE at US$1050-1100 did not find buyers. Buying intentions in the region seem to be pegged almost 100 dollars lower as cargoes from Iran were traded at US$940/MT CFR China. Key processors in Asia, particularly China, rely very heavily on demand from the markets of the West. Weakened consumer demand worldwide has deteriorated export demand as well as bearish domestic market sentiments, tanking demand and prices of all feedstocks and polymers. Demand from Chinese processors continues to be subdued, hence prices are expected to witness a further price downward correction.