SEA Domestic PP and PE Markets Remain Under Pressure Despite Lingering Geopolitical Premiums

Domestic polyolefin markets across Southeast Asia continued to trend lower through June as weak demand, improving supply availability, and falling feedstock costs weighed on sentiment. The correction gained momentum after crude oil and upstream petrochemical markets weakened sharply following easing geopolitical tensions in the Middle East.

Although PP and PE prices have declined significantly from their peaks recorded earlier this year, most grades across the region continue to trade above pre-conflict levels, indicating that part of the earlier geopolitical premium remains embedded in the market.

Homo-PP Performance in Southeast Asia

Indonesia

Rally Phase (Feb-Apr): +105%
Correction Phase (Apr-Jun): -38%
Current vs Pre-Conflict: +26%

Malaysia

Rally Phase (Feb-Apr): +86%
Correction Phase (Apr-Jun): -38%
Current vs Pre-Conflict: +16%

Thailand

Rally Phase (Feb-Apr): +90%
Correction Phase (Apr-Jun): -24%
Current vs Pre-Conflict: +44%

Vietnam

Rally Phase (Feb-Apr): +63%
Correction Phase (Apr-Jun): -21%
Current vs Pre-Conflict: +28%

Among the major polyolefins, homo-PP has seen some of the sharpest corrections. Indonesia and Malaysia recorded the deepest declines from their peak levels, while Thailand retained the largest premium compared with pre-conflict prices.

HDPE & LLDPE Performance in Southeast Asia

Indonesia
HDPE: +118% → -36% → +40%
LLDPE: +116% → -35% → +41%

Malaysia
HDPE: +88% → -23% → +46%
LLDPE: +109% → -29% → +49%

Philippines
HDPE: +61% → -21% → +27%
LLDPE: +63% → -22% → +27%

Thailand
HDPE: +85% → -27% → +36%
LLDPE: +82% → -29% → +28%

Vietnam
HDPE: +55% → -19% → +26%
LLDPE: +60% → -24% → +23%

HDPE and LLDPE markets followed a similar pattern, posting strong gains during the rally period before undergoing steep corrections. Indonesia experienced the largest pullback, while Malaysia continues to maintain some of the highest premiums compared with pre-conflict levels.

LDPE has remained the strongest-performing grade in the region. Despite recent declines, prices continue to hold a significant portion of their earlier gains due to relatively tighter supply conditions compared with other polyolefins. Current premiums remain around 34-52% above pre-conflict levels, making LDPE the most resilient segment in the regional market.

Looking ahead, market participants expect additional downward pressure on PP and PE prices. Demand remains weak across most Southeast Asian countries, with buyers continuing to purchase only for immediate requirements. Supply availability has improved considerably, reducing concerns about shortages, while lower crude oil, ethylene, and propylene prices continue to weigh on sentiment.

Many buyers believe prices have further room to decline, particularly as markets continue adjusting toward more normalized levels after the sharp rally seen earlier this year. Unless demand improves meaningfully, the regional PP and PE markets are expected to remain under pressure in the coming weeks.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.