Asian PE Market Faces Pressure Amid Weak Costs and Oversupply

Key Highlights:

1. Price Trends – HDPE, LLDPE, and LDPE prices vary across Ahmedabad, Mundra, and Bhiwandi, with LDPE Lamination at ₹1,23,000/MT.
2. Supply Glut – 2.15 million tons of new capacity expected in 2025, keeping prices under pressure.
3. Market Activity – Post-holiday procurement slow, traders adopting a cautious approach.
4. Industry Shutdowns – Planned maintenance for key petrochemical plants in China, South Korea, Taiwan, and Japan.
5. Global Trends – Saudi Aramco reduces March propane and butane prices by $20/MT; European benzene prices drop by €11/MT.

Polymer Prices Under Pressure Amid Oversupply Concerns

• In Ahmedabad, HDPE Films Near Prime is priced at ₹84,880/MT, while HDPE BM stands at ₹10,000/MT and HDPE BM-OG at ₹84,050/MT. 
• In Mundra, LLDPE 1 MFI NON SLIP is available at ₹94,940/MT. 
• Ahmedabad also sees LLDPE Extrusion Coating Near Prime at ₹1,08,250/MT, and LLDPE Film OG at ₹96,750/MT. 
• In Bhiwandi, both LDPE 4 MFI SLIP GP and LDPE 2 MFI NON SLIP are priced at ₹1,14,000/MT. 
• Meanwhile, LDPE Lamination in Mundra is listed at ₹1,23,000/MT.

Demand and Supply: Slow Market Activity as Traders Wait-and-See

• The Asian PE industry remains under the pressure of oversupply, with existing production capacity at high levels. February inventories were notably high compared to the same period in previous years, with additional concerns surrounding new capacity releases. 
• In 2025, 2.15 million tons of new capacity is expected to enter the market, adding further strain on pricing. Although the rate of new capacity expansion has slowed, the overall market remains supply-heavy, restricting any upward price movement.
• Post-holiday procurement was completed by some companies, yet actual transactions have been sluggish. A lack of market enthusiasm has led to a wait-and-see approach among traders and downstream enterprises, suppressing trading activity. 
• However, despite weak demand, manufacturers continue to express intentions to raise prices due to low processing fees and supply-side reductions.

Upcoming Global Petrochemical Plant Shutdowns & Restarts

1. Several plant shutdowns and restarts are scheduled across the chemical and petrochemical industry in March 2025:

• Yibin Tianyuan plans to shut its PVC plant in Sichuan, China, by the end of March for a one-week maintenance, while Fortishchem is also planning a PVC plant shutdown in Novaky, Slovakia. 
• Oriental Fuji will shut its PP Unit in Ningbo, China, in mid-March for a month-long maintenance. Meanwhile, Hanwha Solutions is set to restart its VCM plant in Yeosu, South Korea, in mid-March after annual maintenance. 
• Idemitsu Kosan aims to restart its PX unit in Chita, Japan, in early March after a shutdown in February, while Hyosung will resume operations at its No.2 PDH unit in Ulsan, South Korea, on March 9. 
• Formosa Petrochemical Corp (FPCC) plans to shut its No.1 RFCC unit in Taiwan for maintenance on March 3.

2. In the market, European Benzene contract prices for March have dropped by €11/MT, settling at €848/MT CIF NWE. 

3. Additionally, Saudi Aramco has reduced its March Propane and Butane contract prices in Asia by $20/MT, with propane now at $615/MT and butane at $605/MT, reflecting softer market conditions.

Expert Opinion: Weak Prices & Limited Volatility Expected

• It is expected that PE prices will remain weak in the short term due to oversupply and weak cost support. Market volatility is likely to be limited, with prices fluctuating within a narrow adjustment range. 
• Future trends will depend on crude oil price movements, new capacity additions, and shifts in demand dynamics.