Southeast Asia PP, PE Markets Stay Flat as China Holiday Slows Trade

Southeast Asia’s PP and PE markets remained largely stable at the start of the week, with traders and converters reporting little change in both domestic and import prices. China’s ongoing National Day holiday has reduced the availability of fresh import offers, leaving local suppliers as the main source of material in several regional markets.

Although crude oil and feedstock prices have eased recently, they remain relatively high and volatile. This has limited producers’ willingness to offer significant discounts, while downstream buyers are also struggling to absorb higher raw material costs because passing them on to end users remains difficult.

Muted activity keeps markets balanced

Market activity across Southeast Asia remained subdued early in the week, with many participants adopting a wait-and-see approach. Offers from various origins were largely unchanged, while market participants attributed the slow trading environment partly to China’s extended holiday absence.

Weak downstream demand continued to limit buying interest. In Indonesia, one converter said offers from a major domestic producer remained too expensive despite recent selective price reductions. The converter added that raising finished-product prices was difficult because customers were also resistant to higher costs. Although the company had managed to negotiate higher prices for some year-end contracts, order volumes had not increased.

Another Indonesian converter said traders were actively approaching buyers with offers and that the company intended to replenish stocks, but only if suppliers were willing to provide attractive discounts.

In Vietnam, a trader described demand as weak and said buyers were reluctant to replenish inventories because both domestic and import prices remained high. The trader also said there were no plans to make fresh purchases under current market conditions.

A Vietnamese end-product manufacturer similarly pointed to the limited ability of downstream businesses to absorb higher feedstock costs or pass those increases on to customers.

Supply remains supportive for sellers

While demand remains weak, supply conditions continue to provide some support to sellers. A Malaysian end-product trader reported that domestic polyolefin availability was relatively tight, particularly for PP, as import flows remained limited.

However, stagnant demand continued to weigh on the market, with customers frequently complaining about elevated prices. The trader said some shipments had recently been sold, although inventory levels remained comfortable.

Another Malaysian converter said a major domestic producer had already sold out its available material, highlighting the relatively tight supply situation in the local market.

Lower upstream costs offer limited relief

Upstream cost support has weakened somewhat, but the recent decline in crude oil and feedstock prices has not yet been enough to prompt major changes in seller pricing.

Brent crude futures remained highly volatile. The benchmark briefly moved below $100/bbl during intraday trading on October 6 after closing above that level the previous day. The continued price swings have encouraged market participants to remain cautious rather than pushing sellers toward aggressive reductions.

A Philippine trader said crude and feedstock values had recently declined, but their still-elevated levels were keeping most offers stable.

Feedstock trends remain mixed

Regional feedstock markets have shown mixed movements. After remaining broadly stable early in the current week, CFR Southeast Asia ethylene and propylene prices followed different directions during the previous week.

Ethylene extended its decline for a second consecutive week, while propylene climbed to a five-month high after gaining more than the losses recorded in the previous week. CFR China prices for both feedstocks were also stable at the beginning of the week, although both had retreated over the previous two weeks from multi-month highs.

Market participants are monitoring these cost developments closely, but neither buyers nor sellers appear willing to make significant moves while geopolitical uncertainty persists and Chinese suppliers remain absent from the market.

A Malaysian converter said a major domestic producer is expected to announce its new monthly price list next week. The announcement could provide an important indication of the direction of regional sentiment.

For now, Southeast Asia’s PP and PE markets remain caught between limited supply, cautious sellers, weak demand and uncertain upstream costs.

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