OVERVIEW
· China PE import market mixed, higher crude drives up some offers
· SE Asia import prices mixed, uncertainty grips market on Russia-Ukraine conflict
· HDPE prices pressured by price competition, waning buyer appetite
China’s PE import prices were mixed with softer price discussions noted in the early half of the week as weak domestic prices generated low buying interest from importers. But some overseas suppliers raised their offers in the second half of the week due to rising crude oil prices.
Southeast Asia’s PE import prices were also mixed with the regional market gripped by uncertainty and with some buyers and sellers deciding to wait for further developments in Ukraine before making any decisions on PE pricing.
Most Middle East suppliers announced higher offers for March shipment cargoes due to higher crude and feedstock prices but not all of those translated into deals as buyers pushed back against the latest price hikes.
Some HDPE prices saw unexpected declines this week as suppliers were unable to push through any price increase and as buyers were heard to have stocked up sufficient inventory. HDPE prices in Vietnam especially were under pressure because of stiff pricing competition from northeast Asian suppliers, resulting in a widening of assessment ranges.
OUTLOOK
· SE Asia market likely to monitor crude, feedstock trends for clues
· Lower-than-expected production margins may weigh on run rates
· Some fearful of panic buying if Ukraine situation becomes wider conflict
LDPE
Click here for the list of deals and discussions for China and here for southeast Asia.
The CFR China price assessments were based on deals.
CFR SE Asia dutiable prices were assessed on offers at the high end with the low end assessed in line.
CFR SE Asia non-dutiable prices were assessed on offers at the high end with the low end assessed in line.
CFR Vietnam prices were assessed on deals.
LLDPE
Click here for the list of deals and discussions for China and here for southeast Asia.
The CFR China price assessments were based on deals.
CFR SE Asia dutiable price assessments were based on deals.
The CFR SE Asia non-dutiable assessments were based on deals and offers.
CFR Vietnam price assessments were based on deals.
HDPE
Click here for the list of deals and discussions for China and here for southeast Asia.
HDPE FILM
The CFR China price assessments were based on deals.
CFR SE Asia dutiable price assessments were based on deals.
CFR SE Asia non-dutiable prices were assessed on deals.
CFR Vietnam price assessments were based on deals.
HDPE INJECTION
HDPE low-MI injection CFR China price assessments were based on the deals at the high end with the low end assessed stable due to limited bids and buying indications in the week.
HDPE high-MI injection CFR China price assessments were based on deals and buying indications.
Dutiable and non-dutiable CFR SE Asia HDPE injection prices were assessed in line with the dutiable and non-dutiable HDPE film prices in limited price discussions.
The CFR SE Asia all-origins range reflected the high and low ends of the dutiable and non-dutiable ranges.
HDPE BLOW MOULDING
The CFR China price assessments were stable in limited prices discussions in the week.
Dutiable HDPE blow moulding CFR SE Asia price assessments were based on offers at the high end with the low end stable in the absence of bids or buying indications.
Non-dutiable HDPE blow moulding CFR SE Asia prices were assessed on deals at the low end with the high end maintained in limited price discussions.
The CFR SE Asia all-origins range reflected the high and low ends of the dutiable and non-dutiable ranges.
Offers for imports into Vietnam were at $1,370/tonne CFR Vietnam.
OTHER REGIONS
European PE players are processing the latest events in the Russia-Ukraine conflict, and what they could mean for supply and prices. With the influential upstream monomer contracts due to settle in the coming days, naphtha’s sharp upturn in price amid the crude oil rally will be a key concern.
Turkish polyethylene (PE) and polypropylene (PP) outlook has been disrupted by the Russian invasion of Ukraine.
The combined polyethylene (PE) and polypropylene (PP) inventories of Chinese state-owned petrochemical giants Sinopec and PetroChina fell week on week, market sources said on Friday.
PRODUCTION
Blue:expected capacity
Green:online
Orange:scheduled shutdown
Red:unscheduled shutdown
Click here for the ICIS Live Supply Disruption Tracker
ANALYTICS
Packaging
Global plastic packaging is driven by sustainability trends and legislative pressure. The outlook is mixed. Positives include increasing demand for food packaging, consumer retail goods etc. In addition, consumer sentiment has improved due to successful vaccination roll- out programmes, which have increased tourism and hospitality. On the other hand, anti-plastic sentiment poses a major threat to the market. However, single-use plastic usage in the healthcare sector is expected to continue. These applications are, in general, exempt from bans and should remain strong.
Debt levels are high for some individuals and government support schemes are starting to wind down. Recovery in the packaging sector will be a function of customer demand and managing supply chain disruption. The outlook remains dependent on government policy on lockdowns and unemployment support as well as consumer willingness to spend amassed savings.
Environmental pressures remain high and brands continue to look for ways to use either less plastic or more recycled or recyclable plastics. This has resulted in growing demand for recycled plastics in packaging. European companies are prioritising sustainability over costs, although the availability of recycled materials remains an area of concern.
In December 2021, total retail sales of consumer goods in China increased by 13% year on year, and catering, one of the hardest-hit sectors during the pandemic, surged 19% year on year. This indicates that domestic demand is strong, which is good news for the packing sector. Packaging growth was also supported by an increase in beverage sales of 20% year on year. Demand for recycled
polymers continues to outpace supply in China and the rest of Asia.
By Jincy Varghese, ICIS demand analyst (jincy.varghese@icis.com)
UPSTREAM
Click here for the Asia feedstocks and petrochemicals weekly summary.
The spread between ethylene prices and LLDPE prices in southeast Asia narrowed further this week while the spread between ethylene and PE in northeast Asia sank further below the threshold level.
The following charts show the spread between Asia LLDPE film and ethylene spot prices.
Feedstock Spread – Ethylene and LLDPE SE Asia
Feedstock Spread – Ethylene and LLDPE NE Asia
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