Tighter Supply and Higher Costs Lift Southeast Asia’s Import PE Market

Southeast Asia’s import polyethylene (PE) market regained its upward momentum by mid-October after starting the month on a relatively quiet note. Reduced availability and stronger upstream costs gave sellers renewed confidence to increase offers. However, the recovery continued to be driven mainly by supply constraints and cost pressures rather than stronger demand, as buyers remained cautious and focused on securing competitively priced cargoes.

Import PE Prices Recover After Three Weeks of Limited Movement

The market had experienced a slowdown for around three weeks following a rally that lasted more than two months and pushed prices significantly higher. By mid-October, rising upstream costs and tighter availability, particularly of Middle Eastern material, encouraged sellers to seek further increases. The withdrawal of some lower-priced cargoes also helped lift prices at the lower end of the market.

The weekly average price of LDPE film reached its highest level since early June. Meanwhile, HDPE and LLDPE film averages climbed to approximately five-month highs. Despite these gains, prices remained below the peaks reached during April’s sharp rally. LDPE film was still $175/ton below its mid-April peak, while HDPE film remained $130/ton lower. LLDPE film was also $150/ton below its early-April high.

The gap between current prices and previous peaks highlights the limitations of the latest recovery. Although limited supply and higher production costs have strengthened sellers’ negotiating positions, continued resistance from buyers has restricted the scale of price increases.

Supply Tightness and Upstream Costs Support Seller Offers

Upstream cost pressure became more pronounced around the middle of October. Brent crude rising by approximately 4% week on week, with its weekly average reaching around $106 per barrel. Spot ethylene prices on a CFR Southeast Asia basis also increased by $10/ton, ending a three-week declining trend.

Higher crude and naphtha values, together with the recovery in ethylene prices, provided sellers with additional support for raising PE offers.

At the same time, supply availability tightened, particularly for material originating in the Middle East. Market participants reported shipment delays from the region, prompting sellers to maintain or increase their offers. The reduced availability of Middle Eastern cargoes also limited buyers’ choices, especially after some competitively priced shipments were quickly absorbed.

Regional buyers generally maintained lean inventories and showed little willingness to build stocks at current price levels. Most continued to purchase according to their immediate needs. Although this cautious approach reflected subdued demand, it also prevented inventories from accumulating significantly, leaving the market more exposed to shipment delays and further supply disruptions.

Buyers Compare US Cargoes With Faster Regional Supplies

Demand remained the main constraint on the market’s recovery. Buyers largely resisted higher offers, while market participants described consumption as weak to moderate. Converters were also concerned about passing increased resin costs on to end customers, keeping purchasing activity focused mainly on immediate requirements.

In this environment, buyers assessed the price advantages of US-origin PE against the shorter delivery times offered by nearby suppliers. US cargoes were quoted near the lower end of prevailing import price ranges during the week and attracted interest despite longer shipping lead times.

However, the uncertain market outlook made forward purchasing more challenging. Buyers considering cargoes that would arrive several months later faced the possibility of unfavorable price movements before delivery. Even so, the comparatively attractive pricing of US material encouraged some purchasing interest.

For buyers requiring faster delivery, regional cargoes remained an alternative despite their higher prices. In Vietnam, one buyer was considering LDPE film from a Malaysian producer at around $1,600/ton CIF, compared with Middle Eastern offers at approximately $1,530–1,550/ton CIF.

The buyer explained that paying slightly more for Malaysian material at $1,600/ton CIF was preferable because it could arrive much sooner, even with Middle Eastern offers available near $1,550/ton CIF.

Overall, tighter supply and firmer upstream costs have renewed upward pressure on Southeast Asia’s import PE prices. However, weak-to-moderate demand and persistent buyer resistance continue to limit the recovery, with purchasing decisions largely shaped by price competitiveness and delivery schedules.

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