Local PP, PE market in Malaysia rebounded on exchange rates and firmer overseas markets

The Malaysian PP and PE market has experienced a notable rebound, with a leading domestic producer announcing significant price increases for November deliveries. These hikes are largely attributed to the depreciation of the Ringgit and a strengthening regional market. However, the abrupt nature of these price changes has raised concerns among market participants, contributing to a cautious sentiment within the industry.

The latest price list and changes are shown in the following table: 

The recent appreciation of the US dollar has placed considerable strain on Asian currencies, with most experiencing significant pressure throughout October. This downturn follows a period of traders reassessing the likelihood of Federal Reserve interest rate cuts and retreating from riskier assets ahead of the upcoming US elections. Notably, the Ringgit has depreciated by over 6% against the dollar this month, marking its steepest monthly decline since August 2015. 

One distributor expressed concern about the impact of these price increases, “Many of our customers made substantial replenishments last month at more favorable price points. We fear these steep hikes could drive buyers to the sidelines, stifling market activity.”

Additionally, market insiders have linked the recent price adjustments to an optimistic economic outlook for China. Anticipation is building around potential government stimulus packages expected to be announced during the upcoming 4-8 November meeting, which could further influence market dynamics. International suppliers have been adopting a firm stance on import offers to Southeast Asia, capitalizing on these evolving expectations.

Written by: Henny Sunarto

Edited by: Rochelle Nguyen