Asia’s metallocene LLDPE import market subdued on thin buying appetite

SINGAPORE (ICIS)–Metallocene linear low density polyethylene (mLLDPE) import markets across Asia remained subdued on thin buying appetite on the back of relatively weak demand for end products.

(Source: Photo by Imagine China/Shutterstock)

Trade across Asia was muted, as the bulk of discussions for October shipments have already wrapped up earlier in the month.

Buyers and sellers have temporarily retreated to the sidelines, pending the release of November offers, likely in the following week.

In China, firmer crude oil values and bullish LLDPE futures values earlier in the week did not provide any significant support to the mLLDPE import market.

Market sentiment weakened further as LLDPE futures slumped 2.1% on 16 October.

C6 (hexene based) mLLDPE spot prices in China remain well above those of southeast Asia, given that low-priced US origin cargoes are unable to penetrate the market in light of the ongoing US-China trade war.

The ample availability of competitively priced US-origin cargoes in southeast Asia continue to weigh down on sentiment for MLLDPE prices across the region.

The current price gap between C6 mLLDPE prices in China and southeast Asia were around $40-70/tonne, with prices assessed at $1,140-1,160/tonne CFR (cost and freight) China and $1,070-1,120/tonne CFR SE (southeast) Asia, according to ICIS data on 16 October.

Regional supply in southeast Asia is also expected to lengthen as a local Malaysian producer has plans to produce C6 mLLDPE cargoes from its new 350,000 tonne/year LLDPE plant in the near future.

Converters in Thailand refrained from purchasing imports as locally-produced materials introduced since September were available at attractive prices.

The locally-produced C6 mLLDPE cargoes were offered at around Baht (bt) 34/kg, equivalent to around $1,080/tonne against import offers from a southeast Asian producer at $1,120/tonne CFR Thailand.

In India, the standing offers for non-dutiable C6 mLLDPE cargoes were largely available at $1,150-1,200/tonne CIF (cost, insurance and freight) India against buying indications pegged at $1,140-1,150/tonne CIF India.

Most market players opt to stand on the sidelines as the uncertainty surrounding the plastics policy in the country dampens sentiment.

Trade in India is expected to slow ahead of Diwali in late October as some offices will close from as early as 26 October. They will reopen in the week of 4 November.

Focus article by Felita Widjaja