SE Asia PP, PE rebound as renewed Middle East risks halt march toward pre-war prices

Southeast Asia’s import PP and PE markets have ended nearly three months of continuous declines as stronger crude oil prices and renewed geopolitical tensions in the Middle East boosted seller confidence across the region. After weeks of aggressive price reductions aimed at clearing inventories, suppliers have started raising offers, signaling a shift in market sentiment.

Chinese exporters led the latest price increases, while Middle Eastern suppliers also returned with firmer quotations after largely maintaining stable offers during the previous week. The rebound follows a sharp recovery in crude oil and upstream olefins, which has encouraged sellers to reassess their pricing strategies.

Higher feedstock costs support polymer prices

Earlier, buyers largely ignored rising crude oil prices, believing that abundant supply and weak downstream demand would continue to pressure polymer markets. However, the latest surge in energy prices has provided stronger cost support.

Brent crude has climbed significantly over recent trading sessions, while Asian propylene and ethylene markets have also posted notable gains. The improvement in feedstock values has strengthened supplier confidence, resulting in higher PP and PE offers across Southeast Asia.

Import PP prices increased by as much as $50/ton during the week, while PE markets shifted from declining to stable-to-higher levels, ending the prolonged downtrend that had been in place since April.

Buyers remain cautious despite firmer sentiment

Although prices have started to recover, buying activity remains measured. Many converters continue purchasing only small volumes to meet immediate production requirements, while closely monitoring whether the recent rebound will develop into a sustained recovery.

Some buyers with lower inventories returned to the market to reduce replacement-cost risks, but overall demand remains subdued due to weak consumption in downstream industries.

Market participants also noted that the gap between buyers' bids and sellers' offers remains relatively wide, limiting the number of concluded transactions despite improving sentiment.

Markets had nearly returned to pre-war levels

Before the latest recovery, Southeast Asia's import polyolefin markets had already surrendered most of the gains recorded during the earlier Middle East conflict.

Only modest premiums remained above pre-conflict levels, with Homo PP retaining around $145/ton, LDPE film around $125/ton, HDPE film approximately $105/ton, and LLDPE film about $60/ton. The recent rebound has interrupted what had been a steady move toward pre-war pricing.

Outlook depends on demand recovery

Despite stronger energy markets, most participants believe the current recovery is still primarily cost-driven rather than demand-led.

Regional polymer availability remains comfortable, downstream manufacturing activity is seasonally slow, and buyers continue to avoid large inventory commitments. While higher crude oil prices may have established a temporary price floor, a sustained upward trend is expected to depend on stronger end-user demand or any significant disruption to regional polymer supply.

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