Morning Briefing - 24 Feb. 2025

CommoPlast

Morning Briefing

24 February 2025

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Potential Supply Disruptions 

China’s homo-PP market faces a significant risk of supply curtailment in Q2, with more than 20 production units slated for maintenance. The anticipated production losses exceed 200,000 tons in the first month alone, heightening concerns over potential supply constraints in the coming quarter.

In response to a tightening outlook, suppliers have maintained a cautiously optimistic outlook, refraining from excessive price concessions despite currently elevated domestic inventory levels. However, this confidence has yet to translate into stronger buying activity, as downstream buyers report sluggish post-holiday recovery across key end-product sectors

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Tight Supply Vs. Weaker Demand

Malaysia’s PE market faces an increasingly complex landscape as tightening local supply conditions are met with a significant slowdown in demand. Key regional and international suppliers have reported limited allocations for Southeast Asia, exacerbating the already constrained supply conditions in this market. However, buying sentiment remains weak, with market activity slowing ahead of the Ramadan season.

Industry sources told CommoPlast that packaging sector converters are witnessing a sharp decline in end-product demand. Many have accumulated sufficient inventory to sustain production for the coming months, reducing their urgency to procure additional raw materials. While both local and international suppliers may push for higher PE offers in March, such attempts are likely to meet strong resistance from Malaysian buyers, given the prevailing market conditions.

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