SEA buyers: Tight supply might push LDPE film price higher

As a number of regional and international LDPE plants are entering the maintenance shutdown season, Southeast Asian players reported seeing very limited number of new offers for this grades at the moment, which foster expectation for higher prices in the coming days.

With the shutdown at Lotte Chemical Titan, Formosa and PTT, market sees an estimated production loss of nearly 45,000 tons of LDPE during the period. And if Qapco confirmed two weeks shutdown in March (which the producer is planning to postpone to April), the number might jump to over 73,000 tons – a considerable amount to support the firming trend, in addition to the current ethylene costs.

A regional buyers commented, “We normally deal with Malaysian LDPE film and our supplier has been having very small allocation for few months in a row. With the current supply situation, we think new offers from the producer might be near to the $1450/ton threshold.”

Another Vietnamese buyer added, “We agreed to purchase Saudi’s LDPE film at $1380/ton CIF term, yet our supplier has no quantity to supply. Domestic market is very short due to lack of import cargoes arrival and this condition might persist in the coming month.”

Other suppliers have also brought up intention to implement substantial hike on March shipment, with an international trader informed, “Our Singaporean principle supplier has informed about a medium to large scale price hike in the next price opening on the back of higher ethylene costs and low sales pressure. Therefore, we think the recent weakness in local China market might not create much impact on the regional ground.”