Southeast Asia PE stable in holiday-shortened week; thin trade

SINGAPORE (ICIS)–Southeast Asian polyethylene (PE) import market remains stable across all grades in the week but expectations of tighter regional supply might provide support in the near term.

(Source: REX/Shutterstock)

Trade in the region, particularly in Indonesia and Thailand, was largely subdued amid the holiday-shortened week with limited deals done.

Indonesia held its presidential and parliamentary elections on 17 April, while Good Friday is celebrated in Indonesia as well as in the Philippines.

Thailand market reopened to a slow start in the week after a week-long Songkran holiday to celebrate Thai New Year from 13 April to 17 April.

Most suppliers have yet to announce fresh offers for May shipment cargoes, although several selling indications remained firm amid thin availability of competitively priced cargoes, while buying interest was muted amid thin end-product demand.

Offers for Middle East linear low density polyethylene (LLDPE) film cargoes were available at $1,030-1,050/tonne CFR (cost & freight) SE (southeast) Asia.

US-origin LLDPE film cargoes were deemed unattractive as offers were above $1,000/tonne CFR SE Asia for long shipment time of beyond eight weeks.

Offers for Middle East and Saudi high density PE (HDPE) film grade were $1,060-1,100/tonne CFR SEA, which were met with limited buying interest.

Regional supply in southeast Asia is expected to tighten further, due to scheduled shutdowns and production issues following a string of chemical plant explosions in Asia, some of which had affected the respective downstream PE production plans.

The recent fire that broke out at PETRONAS’ Pengerang Integrated Complex (PIC) in Johor, Malaysia, might cause further delays in commercial PE production as safety inspections are still underway, according to market sources.

The Refinery and Petrochemical Integrated Development (RAPID) downstream plants include a 350,000 tonne/year LLDPE unit, which is also capable of producing metallocene LLDPE (MLLDPE) grades and a 400,000 tonne/year HDPE plant.

The spread between ethylene and LLDPE film import prices in southeast Asia had widened and stayed above the threshold line as ethylene prices dropped slightly while LLDPE prices were stable.

Thus, the incentive for some integrated PE producers to sell their ethylene instead of producing PE in general remains low.

Some market players expect trade to pick up in the following week when offers are made available which will provide clearer market direction.

Focus article by Felita Widjaja