Polyethylene Price Cuts Face Buyer Resistance Amid Supply Uncertainty

Price

• PP Raffia: (±0) Rs 94/kg levels Ex Godown.
• PP Film: Rs 100/kg levels Ex Godown.
• PP CP: (±0) Rs 99.75/kg levels Ex Godown.
• PP Lamination: (±0) Rs 104.25/kg levels Ex Godown.
• LLDPE: (-0.5) Rs 86/kg Ex Mundra/Bhiwandi.
• LDPE: (±0) Rs 118/kg Ex Mundra/Bhiwandi.
• HDPE PE100 Natural: (-1) Rs 91/kg Ex Mundra/Bhiwandi.
• HDPE PE100 Black: (±0) Rs 93/kg Ex Mundra/Bhiwandi.
• HDPE HM: (±0) Rs 92/kg Ex Mundra/Bhiwandi.
• HD Blow Molding: (±0) Rs 91/kg Ex Mundra/Bhiwandi.
• Low K (P700/TH700): (+0) Rs 81.50 Ex Nhava Sheva/Mundra.
• LG LS100H: (+0) Rs 75.75 Ex Mundra/Bhiwandi.

Demand and Supply

• Major Saudi Arabian producers have opened September PE shipment offers to Vietnam with significant reductions compared to August, reflecting the ongoing downtrend across the region.
• Despite the sharp cuts, market response has been tepid, with several buyers submitting counteroffers well below the producer's initial price list.
• Vietnamese buyers are particularly concerned about the potential impact of the recent start-up at the Long Son Petrochemical plant, which could increase local supply and exert additional downward pressure on prices.
• Market participants are closely watching the producer’s export activities to better understand the near-term outlook.
• Meanwhile, buying ideas for Saudi HDPE film have surfaced below the $950/ton mark, and LLDPE film offers are ranging between $960-980/ton CIF Vietnam.

News

• The US Butadiene (BD) Contract Price for September increased by 1.25 cents/lb from its August settlement levels, driven by tighter supply in the US due to lingering feedstock allocation issues.
• Sabic from Saudi Arabia has offered their LDPE Film at US$ 1180/MT, LDPE Injection at US$ 1220/MT, LDPE Base grade at US$ 1150/MT, and LDPE Extrusion Coating at US$ 1380/MT, CIF Nhava Sheva/Mundra/Hazira port basis for September 2024 shipment.
• Naphtha prices were assessed lower at US$ 690/- per MT CFR Japan basis.
• Styrene Monomer prices were assessed higher at US$ 1135/- per MT FOB Korea basis.
• Ethylene prices were assessed stable at US$ 885/- per MT CFR NE Asia and US$ 985/- per MT CFR SE Asia basis.
• Propylene prices were assessed stable at US$ 865/- per MT CFR China basis.
• Shandong Hualu Hengsheng is in the process of restarting its Acetic Acid Unit located in Dezhou, Shandong, China.
• Sinopec Hainan Petrochemical is planning to restart its HDPE/LLDPE Plant at the end of August 2024 after maintenance work. The plant is located in Yangpu, Hainan, China.

Expert's Opinion

• Recent price hikes are meeting strong resistance from overseas buyers, creating uncertainty about the durability of export demand. Producers may need to adjust their pricing strategies to address this resistance. Continued buyer pushback could slow export volumes as they seek alternatives or demand lower prices.