SE Asia PE hits lowest in 2014 on weak demand, bearish sentiment

Arianne Perez

24-Nov-2014

SE Asia PE hits lowest in 2014 on weak demand, bearish sentimentSINGAPORE (ICIS)–Spot prices of polyethylene (PE) resins in southeast Asia slumped to their lowest level so far in 2014 on persistent demand weakness amid an overall bearish market sentiment, industry sources said.

On 21 November, low density polyethylene (LDPE) was assessed at $1,515/tonne CFR (cost and freight) SE (southeast) Asia; linear low density PE (LLDPE) at $1,505/tonne CFR SEA; and high density PE (HDPE) at $1,513/tonne CFR SE Asia, according to ICIS data.

Declines in costs of feedstock ethylene also weighed down on the regional PE market, industry sources said.

Ethylene prices fell by $30/tonne week on week to $1,160-1,180/tonne CFR NE (northeast) Asia on 21 November, according to ICIS.

“Buyers ‘[of PE resins] are very cautious now – they don’t want to transact long quantities at such a volatile time,” said a trader that sells to the Vietnamese market.

Appetite for imported PE resins in southeast Asia has been weak, with some buyers limiting their purchases to immediate requirements, sellers said.

“They are merely buying very small quantities for their most immediate needs and when they do that, they will get from the domestic suppliers,” an Indonesian based trader said.

Market participation last week had been limited on expectations that prices will fall further.

“There is no immediate support seen for the PE prices to go up anytime soon and in fact, most of the buyers believe prices have not bottomed out,” a Malaysia-based producer said.

Trade is expected to remain sluggish until the end of this year, “with not much hope for a price rise in sight”, the producer said.

“Everyone I’ve spoken to has not been very positive. In fact, some buyers are not practicing wait-and-see approach in the week, they simply would not enter the market at this bearish time,” he added.

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

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