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Import HDPE and LLDPE film to China has been constantly following the up-trend since early July 2017 following limited supply from Thailand, Taiwan, Iran and Qatar suppliers. From mid of August, international suppliers implement larger hike to the country as buying appetite improve, leading to the fact that import HDPE and LLDPE film are now traded at premium over Southeast Asia. 

Such condition is attracting overseas sellers to allocate more cargoes to China where netback is better, leaving very limited availability in Southeast Asia. Several producers even take more aggressive stance by withdrawing offers to SEA markets, claiming running out of quantity.

A major Saudi Arabia producer earlier this week announced fresh offers to Vietnam at $1170/ton for LLDPE film and $1160/ton for HDPE film, all based on CIF, LC AS term. The maker is not interested in any price negotiation with a distributor added, “Buyers are placing bids at $1140/ton with the same term, however our principal supplier might divert the cargoes to China instead of lowering prices to Vietnam.” The same produce did not allocate any quantity to Indonesia, reserving the allocation to China.

Another Saudi maker decided to postpone September offer announcement to Southeast Asia claiming that Chinese buyers are accepting import LLDPE film at $1180/ton CFR China, LC AS term. As a result, more cargoes might be directed to China this time as Southeast Asian buyers are not in the position to accept this level yet.

Two major producers from Saudi and Thailand have suspended all offerings to Vietnam following the development and players are expecting further hike to emerge in the coming week. “If ethylene costs remain high and buying appetite in China sustain the current condition, import HDPE and LLDPE film offers to Southeast Asia might hit above the $1200/ton threshold. We temporary stop all purchasing activities at the moment,” a regional buyer said.