SE Asia PE prices seen declining further on weak demand

SINGAPORE (ICIS)–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, market participants said on Tuesday.

Ethylene prices were assessed at $1,000-1,050/tonne CFR (cost & freight) SE (southeast) Asia on 12 December, a drop of $130/tonne against the previous week, according to ICIS data.

Meanwhile, PE resin prices dropped to a new record low in 2014 by the week of 12 December, according to ICIS data.

Low density polyethylene (LDPE) all origins prices were assessed at $1,200-1,290/tonne CFR SE Asia, a fall of $85-115/tonne from the previous week.

Similarly, LLDPE (linear low density polyethylene) all origins prices were assessed at $1,240-1,350/tonne CFR SE Asia, registering a drop of $60/tonne against last week, and HDPE (high density polyethylene) at $1,300-1,400/tonne CFR SE Asia, softening by $50/tonne compared to the previous week.

Southeast Asian market players believe that the spread between PE resins against 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.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections