Asian PE Import Prices Continue to Rise as Buyers Turn Cautious Before China Holidays

Import polyethylene (PE) markets across China, Southeast Asia, and India remained supported by high crude oil and feedstock costs last week, along with limited availability from several supply origins. During the week ending September 18, import PE prices recorded notable gains in China and Southeast Asia, while Middle Eastern offers in India largely held at already elevated levels. However, the continued price increases also resulted in growing resistance from buyers across all three markets.

Upstream costs remained an important factor supporting PE prices throughout the region. However, the strong rise in crude oil prices began to moderate toward the end of last week. Brent crude futures, after moving above $108/bbl earlier in the week, settled at $103.87/bbl on Friday. Prices moved lower during early Monday trading, with Brent trading near $102/bbl as concerns over supply disruptions eased. At the same time, spot ethylene prices on a CFR China and CFR Southeast Asia basis remained close to four-month highs. Therefore, despite the recent decline in crude oil, high energy and feedstock costs continued to support supplier pricing and helped maintain elevated import PE price levels.

The continued price rally, however, has not been accompanied by a widespread recovery in demand. Buyers across China, Southeast Asia, and India have become increasingly selective as higher resin prices put pressure on margins and make fresh purchases more difficult to justify. Some applications, particularly agricultural and greenhouse film production in China, have offered seasonal support, but purchasing activity across much of the market remains largely limited to immediate requirements. Consequently, the current strength in PE prices continues to be driven primarily by supply restrictions and higher production costs rather than a clear improvement in downstream consumption.

China: Limited Availability Continues to Support PE Prices

China’s import PE market maintained its upward movement for more than two months, extending the rally into mid-September. According to the ChemOrbis Price Index, weekly average import prices for LDPE and HDPE film moved close to their highest levels in four months. The weekly average LLDPE price also reached its highest point since late May 2022.

Higher production costs and tighter material availability were key factors behind the latest increases. A trader dealing in Saudi Arabian cargoes reported another significant increase in Middle Eastern offers as energy and feedstock costs moved higher. A Taiwanese producer also highlighted restricted feedstock availability and lower operating rates, particularly for HDPE and LLDPE, as factors limiting supply.

Geopolitical restrictions and shipping-related uncertainties continued to affect overseas availability. Meanwhile, US-origin material was largely accessible through indirect trading channels rather than direct offers from producers.

Despite the firm physical market, demand has not strengthened to the same extent. The approaching holiday period is creating additional uncertainty for China’s import market. The Mid-Autumn Festival is scheduled for September 25-27, followed by the week-long National Day holiday from October 1-7. With these holidays approaching, some market participants may become more cautious about replenishment, while trading activity could slow before the extended break.

As a result, buyers are likely to remain focused on covering immediate requirements instead of building substantial inventories, particularly with prices already at elevated levels.

A source from a Taiwanese producer reported some improvement in agricultural film demand, especially for HDPE film, while demand from several other downstream sectors remained weak. Another trader noted that overall demand had not experienced a significant improvement, with even agricultural and mulch film manufacturers continuing to purchase mainly according to immediate needs.

Southeast Asia: Higher Prices Face Increasing Buyer Pushback

Southeast Asia recorded some of the strongest import PE price increases among the three markets, with prices rising by as much as $70/ton during mid-September. According to the ChemOrbis Price Index, weekly average import PE prices in the region reached three-month highs.

The latest price increases were supported by higher upstream costs as well as tighter supply. A source from a Taiwanese producer linked the continued price strength to firmer crude oil values and limited raw material availability, while also pointing to generally low operating rates.

Middle Eastern supply continued to face uncertain shipping schedules. At the same time, US availability was affected by shipping delays linked to low water levels in the Panama Canal. With some sellers reporting limited or no remaining material, suppliers holding available stocks were able to maintain higher price expectations.

However, the difference between seller price ideas and what buyers were willing to pay became increasingly apparent. A Vietnamese trader said buyers were becoming more cautious as the rapid price increases made replenishment more risky, even though there were expectations that prices would remain difficult to push lower.

Demand for Middle Eastern branded material remained comparatively healthy because of supply constraints, but this did not result in a broad recovery in buying activity.

US-origin offers remained relatively competitive in some cases, but interest was limited by higher price levels and extended lead times. Converters also continued to face difficulties in passing increased resin costs on to end users. This encouraged buyers to postpone purchases, work with existing inventories, or look for more economical alternatives.

India: High Replacement Costs Support Prices Despite Buyer Resistance

India’s import PE market remained firm last week, with Middle Eastern offers generally rolling over to slightly higher levels. ChemOrbis data showed that all three major film grades remained close to four-month highs. LDPE continued to carry a considerable premium as supply remained persistently tight.

High replacement costs continued to provide the main support for overseas offers. Strong crude oil and feedstock costs kept supplier price expectations elevated, while restricted availability prevented any significant downward correction. However, buying activity remained measured.

A representative of a Middle Eastern supplier said local converters were continuing to purchase on a hand-to-mouth basis in response to currency movements, while core packaging demand remained firm. The supplier also noted that resistance toward LLDPE purchases appeared to be delaying orders rather than eliminating demand, as local plant inventories remained very low.

Currency weakness has added further pressure to import buying. A Mumbai-based trader said the weaker rupee was making expensive overseas cargoes increasingly difficult for local factories to absorb, particularly when shipments involved longer transit periods.

As a result, buyers continued to favor hand-to-mouth procurement and quicker domestic deliveries instead of committing funds to cargoes requiring around four weeks of transit. Resistance was particularly visible in LLDPE and HDPE, where importers faced a clear limit on workable prices.

Overall, the Indian market remained in a situation where high replacement costs continued to support elevated import PE prices, while actual transaction volumes were restricted by tighter margins, currency-related risks, and cautious inventory management.

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