Import HDPE film hit multi months high in SEA

After an extended period being traded at lower prices compared to other PE film grades, this week, import HDPE film to Southeast Asia makes an impressive come back to reach the highest levels in nearly 35 weeks.

In fact, import HDPE film to the region last hit above the $1200/ton threshold was during mid Jun 2016 and was hovering around the $1150/ton line for several months after as shown in the following diagram. 

Southeast Asian players blamed the tightening general supply to be the main factor driving such rapid price increment in the recent couple of weeks. Thailand’s SCG is still operating at 50 per cent capacity due to lack of ethylene supply and a source close to the producer informed that March allocation for export could remain tight. In addition, Malaysia’s Lotte Chemical is struggling to restart its HDPE line after encountered technical glitches during the third week of last month.

Similarly, Saudi’s PetroRabigh is forced to postpone the restart date at its PE units from mid February to 25 February as the plant faces technical issues since early January this year. On the other hand, both Qatar’s Qapco and UAE’s Borouge are mulling over maintenance shutdown at their PE complexes.

A regional HDPE bags converter received fresh offers for Middle Eastern cargoes at $1210/ton, CIF, LC AS term, some $70/ton hike from last month said, “With the current ethylene costs, we think suppliers might hold very firm stance on their cargoes. Fortunately, we have sufficient material till April, therefore not rush to make purchases at the moment.”

An international trader, who is active in both European and Asia market informed, “Our European customers have accepted prices in the range $1200-1230/ton CIF term, which means it is very likely that sellers would attempt to maintain the current tempo in Asia market.”

Despite such rapid hike in the import offers, it appears that Southeast Asian buyers are not very aggressive in scouting for cargoes. Market are awaiting the return of Chinese buyers and their respond toward the latest prices before making major decision.