The domestic PP and PE markets in Southeast Asia have been going downhill for the past two months, driven by persistently weak demand, although a stronger US dollar continues to detract from the competitiveness of imports to the region.

Indonesia

For example, weekly local polyolefin prices announced by an Indonesian producer over the past two months have seen HDPE and LLDPE film prices drop by 8-12%, while homopolymer and copolymer PP prices drop 17-21%.

An Indonesian converter said earlier in the week: “Domestic and regional demand remains weak due to reduced downstream factory activity due to inflation and higher oil prices since the outbreak of the Russo-Ukrainian war.”

Vietnam

The ChemOrbis Price Tool shows that local PP and PE prices in Vietnam have fallen by 8-10% in the past two months.

Vietnamese buyers still prefer the domestic market because the average domestic PP price in USD is equivalent to the import price by CIF method excluding tax. As per the chart below, the domestic price includes all applicable costs but excludes VAT, while customs duties, customs clearance costs as well as domestic shipping should be added to the CIF value.

As domestic prices remain weak, import quotes seen earlier this week continue to fall. A Vietnamese trader added: “We have just received quotes from Middle Eastern suppliers. Prices were stable from last week, but still about $30-50 less than last month. Sellers appear to want to increase or hold the price, but buyers either bid low, buy less, or just wait and watch.”

Thailand

Thailand's domestic prices fell 8-17% during the same period. In the most recent week, a Thai trader said prices have dropped by 1000-2000 THB/ton, compared with stable PP prices and PE price drops of up to 1000 THB/ton in the previous week.

The trader added: “Demand is so weak because of sluggish demand in downstream markets. Demand is likely to remain weak for the next few months due to the rainy season.”

Malaysia

According to ChemOrbis Price Index, Malaysia's domestic PP and PE prices have also fallen an average of 6-13% over the past two months. HDPE and LLDPE prices witnessed the strongest declines of 11-13% during this period.

A Malaysian converter said the company is not buying too much because the price could fall further. “The source of a local manufacturer told me the current inventory is high. The manufacturer is worried about a lack of space for its growing inventory. The demand as well as the price is too low. They cannot export to China. Selling to the Southeast Asian market isn't too easy either," the converter said, adding: "The producer could be at a loss at current prices."

Philippine

According to the average price from ChemOrbis Price Index, local LLDPE and HDPE film prices have fallen 9-12% since mid-April.

A Philippine trader said domestic demand continues to be affected by the drop in demand in China, as well as the current higher oil prices and inflationary environment.

Import prices to Southeast Asia remain under pressure

PP prices have been on a downward trend since late March, as competitive quotes emerged from Korea, China, Russia and the Middle East. Korean quotes maintained competitiveness in the lower end of the market last week amid continued weakness in demand and lower raw material costs.

For PE, the import market has continued to decline due to competitive quotes still coming from Korea, Russia and the Middle East, besides China's re-exports, due to weak demand and low raw material costs. than.