South East Asian PP, PE buyers continue to be in the sidelines

Players report that there has not been much trading activity in Southeast Asia’s PP and PE markets this week as most buyers have elected to remain in the sidelines in hopes of seeing more attractive prices in the weeks ahead, as per Chemorbis. A major rally in the Chinese polymer markets over the first half of the month pushed spot PP and PE prices higher in Southeast Asia as sellers unable to get prices similar to the prevailing offer levels inside China could easily divert their cargoes to the Chinese market instead. Over the past month, import prices on a CIF SEA, cash equivalent basis have posted increases of US$80-125/ton for homo-PP injection and raffia, US$50-60/ton for LLDPE film, US$80/ton for LDPE film and US$20-30/ton for HDPE film. Over the past two weeks, as the tide has turned in China following the announcement of further government efforts to fight inflation, sentiment has also begun to cool off in Southeast Asia, especially as demand within the region had not been especially good to begin with. While sellers in the region are attempting to limit the size of the current price decreases by pointing to tight supplies, most buyers say that they are prepared to remain sidelined from the market until they see some more significant price concessions, with converters generally adding that they are feeling comfortable with their stock levels these days. Two woven bag manufacturers in Indonesia stated that they are not planning to make any fresh purchases until they see some steeper discounts emerging in the import market. Currently, they have enough material to cover their needs until January. Decline in prices is expected in line with declining spot propylene prices in Asia. A distributor in Thailand reported only interest in doing back to back business these days as most buyers are unwilling to purchase at the current price levels, amid expectation of further price reductions over the near term. A distributor offering locally-held import LLDPE film in Vietnam complained that they are not seeing much buying interest despite conceding to price cuts of US$47-106/ton on their offers this week. Although locally-held LLDPE film is in short supply in Vietnam, attracting buyers is a problem, as the ongoing depreciation of the Vietnamese dong vs the US dollar amid difficulties securing credit from the country’s banks are keeping most buyers out of the market for now. A plastic bag manufacturer in Malaysia plans to wait until next month before making any fresh purchases in spite of the steep price declines of MYR94-199/ton (US$30-64/ton) for LDPE film, MYR148-418/ton (US$47-134/ton) for LLDPE film and MYR52-182/ton (US$17-58/ton) for HDPE film observed in the local market this week.