South-east Asian Low density Polyethylene (LDPE) prices continue to fall with bearish demand

Low density Polyethylene producers in Southeast Asian countries had reduced their prices due to sufficient supply and weak demand. In Vietnam, the Film grade CFR prices were observed to be $1570/ton which was $1590/ton in the first week of December. As compared to the last week of November the LDPE prices were observed to be declined by 4.84%. If we look at the LDPE market trend for Thailand, the Film grade CFR prices were slipped to $1585/ton as compared to the first week of December which was observed to be $1605/ton. The Thailand Low density Polyethylene prices dropped down by 4.84% compared with the last week of November.

The domestic Low density Polyethylene market was observed to be weak as the supply exceeds the demand which increases the inventories among the major producers in Southeast Asia. After the Thailand’s major polymer producers namely HMC Polymer and SCG’s polymer resumed their LDPE plant with improved availability, the saturation in the domestic market due to ample supply had resulted in decrease in price trend. The demand for new stock of Low density Polyethylene were observed to be limited and consumer started purchasing the product in order to fulfil their need-to basis. The declination of upstream ethylene prices prompted by continued weaker buying sentiment and sufficient product availability.

Demand of Low density Polyethylene (LDPE) is a soft, lightweight, and flexible thermoplastic which is made from monomer ethylene. Low density Polyethylene is resistance to impact, moisture, and chemicals. It is produced by compressing monomer ethylene gas in an autoclave or tabular reactor to facilitate polymerization. Low density Polyethylene is widely used for the manufacturing of various containers, dispensing bottles and in plastic industries. Thailand is the regional powerhouse in the Southeast Asian market. Most of the Polyethylene plant in Thailand are situated in Rayong in the Eastern Seaboard including HMC polymer Company limited which is operating three polypropylene lines in 25 Hectare plant and has the production capacity of 810KTPA.

According to ChemAnaylst, it is expected that the market will remain weak due to ample supply and lack of trading activities among the buyers. The costs of Low density Polyethylene will likely to drop down because of adequate inventories and frail demand. High Inventories will make strain on the downstream market to clear their stocks. Upstream Ethylene costs are likewise expected to drop in the SouthEast Asian market. It is estimated that the imports from overseas suppliers will decrease due to sufficient Low density Polyethylene stock in the regional market.