Malaysian PE plunged three digits in Indonesia, PP largely unchanged

A key Malaysian producer opened September shipment offers to Indonesia with drastic decreases in PE cargoes, marking the fifth consecutive month of decline. The latest price list for homo-PP remained largely unchanged from August as the maker is having reduced inventory pressure following production rate cuts.

The producer’s latest price list and changes month on month are shown in the following table:

The producer has reportedly lowered operating rates at the PP plant to 80% since early August as a result of negative profit margins. The maker is among a dozen of other PP plants across Asia, which have slashed run rates in an attempt to protect the bottom lines and balance the persistently sluggish demand conditions. 

“Unfortunately, the new price list is still way above the market acceptance. This week, several other overseas suppliers have stepped back on import homo-PP offers to Indonesia,” a buyer commented. The source cited prices for non-dutiable Vietnamese homo-PP below the $1100/ton threshold based on CIF terms.

For PE, Indonesian customers have been reluctant to make new purchases since last week and locally held LDPE film cargoes are now traded below the $1500/ton threshold, making the new price list from the Malaysian producer unattractive. It is very likely that the producer would face stiff resistance from buyers, especially when the import PE market in China is crashing.