Middle Eastern suppliers indicated lower PE offers for October shipment

Southeast Asian buyers are waiting for major Middle Eastern producers to announce October shipment offers, which likely to take place in the coming week. The initial indication is that new offers might see small to medium discounts under the pressure of falling ethylene costs and the presence of competitive USA materials. 

A Middle Eastern producer sees $20-30/ton discount on both HDPE and LLDPE film cargoes from last month now that supply is more comfortable. “HDPE film market is very bearish. We expect the market to move closer to the $1250/ton mark in the near term. We will be having sufficient allocation for this month,” a source close to the producer informed.

Meanwhile, another Saudi Arabia maker planned to take a softer stance on October shipment citing the need to remain competitive amid the presence of new supplies. “In term of supply, we are not having high allocation for HDPE film as there is a month-long shutdown at our HDPE unit by December. However, demand is rather soft in Southeast Asia market,” the producer said.

Compared to the beginning of September, ethylene costs has fallen $100/ton to Southeast Asia and $95/ton to Northeast Asia. The predominant concern is that ethylene might drop further in the near term due to slack demand from the downstream market.