PE Correction Outpaces PP in SE Asia; LLDPE Sinks Deeper Below Homo-PP

Southeast Asia’s import polyolefin markets continue to move lower following the sharp rally triggered earlier this year. While both polyethylene (PE) and polypropylene (PP) prices have been correcting since reaching multi-year highs in April, PE has experienced a much steeper decline than PP as suppliers aggressively cut offers to attract limited buying interest.

The weakness has been most visible in the PE sector, where LLDPE, HDPE and LDPE prices have faced sustained pressure from abundant import availability and sluggish demand. PP markets have also softened, but the pace of decline has been slower as supply conditions remained relatively more balanced.

Market data shows PE grades have lost substantially more value from their April peaks compared with PP grades. LLDPE film has recorded the sharpest decline among major polyolefins, reflecting intense competition from low-priced imports and cautious buying activity across the region.

Price Correction Snapshot

LDPE Film
Current premium vs pre-war levels: +40%
Correction from peak: -12%
Approximate decline from peak: $200/ton

LLDPE Film
Current premium vs pre-war levels: +28%
Correction from peak: -17%
Approximate decline from peak: $290/ton

HDPE Film
Current premium vs pre-war levels: +35%
Correction from peak: -15%
Approximate decline from peak: $225/ton

Homo-PP Raffia
Current premium vs pre-war levels: +41%
Correction from peak: -12%
Approximate decline from peak: $170/ton

A major development during the correction phase has been the loss of LLDPE’s traditional premium over homo-PP raffia. For the first time in more than two years, import LLDPE film prices have moved below homo-PP prices in Southeast Asia.

The discount first appeared in late April and has widened steadily in recent weeks. By mid-June, LLDPE was trading around $75/ton below homo-PP, highlighting the heavier pressure facing polyethylene markets.

The decline has been fueled by aggressive competition from Chinese and US suppliers, particularly in the LLDPE segment. Low-priced cargoes from both origins have repeatedly set the market floor, forcing other suppliers to lower offers to remain competitive.

Middle Eastern producers have also increased offer volumes as supply concerns eased, adding further pressure to the market. With material widely available from multiple origins, buyers have felt little urgency to secure cargoes and have largely restricted purchases to immediate requirements.

Weak downstream demand remains the biggest challenge. Converters across the region continue to follow hand-to-mouth buying strategies while waiting for prices to fall further. This cautious approach has reduced transaction volumes and encouraged sellers to offer additional discounts to secure orders.

Recent weakness in crude oil prices and improving supply conditions have reinforced bearish sentiment. Market participants increasingly believe that PE prices may face further downward pressure through July, particularly as competition among suppliers remains intense and demand recovery remains uncertain.

For now, the market focus has shifted away from supply concerns and toward the possibility of additional price corrections, with polyethylene expected to remain under greater pressure than polypropylene in the near term.

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