Published On: Fri, Aug 16th, 2013

Asia’s LDPE market exerts upward pressure on Mediterranean

Asia’s LDPE market exerts upward pressure on Mediterranean

Asia’s LDPE market exerts upward pressure on Mediterranean

The rising price trend in Asia’s LDPE market is exerting upward pressure on the Mediterranean region when considering historical price differences between the regions. A look at ChemOrbis’ Price Wizard shows average LDPE prices in both China and Southeast Asia have risen above both Turkey and Egypt, disrupting the usual balance.

This week a Middle Eastern producer announced a price increase on its LDPE offers to China. A source from the producer said, “We raised our LDPE prices by $30/ton from last week for September shipments. Given our limited supplies and high production costs, we plan to insist on our prices over the short term.”

The trading arm of a West European producer agreed that overall supplies are tight for this product noting, “We do not have volumes available for China as we prefer to sell in the European market as freight costs are lower and supplies in the region are tight for LDPE film and coating.”

Asia’s LDPE market exerts upward pressure on Mediterranean

Asia’s LDPE market exerts upward pressure on Mediterranean

In Southeast Asia, a source at a major regional producer reported their sell ideas for September shipments of LDPE with increases of $40-50/ton. The source commented, “We have limited availability due to a maintenance shutdown. We believe prices will retain an upward trend for now due to plant shutdowns in the region.”

Looking at historical prices in China and Turkey for the year, Turkey has held a consistent premium over China’s LDPE prices. Last week, prices were nearly at par and in the current week, the average LDPE price in China has surpassed the Turkish market. Turkey’s domestic producer, Petkim, was reported to have raised its local offers for LDPE by $20/ton this week. A trader in Turkey commented, “PE imports are clearly under upward pressure, we are even below China at this time.”

An analysis of the Egyptian LDPE market shows a similar historical trend with LDPE prices in Egypt traditionally above those in China, according to ChemOrbis. Currently, there is a discount in the Egyptian market relative to China. The Egyptian market is awaiting new price announcements for the month of September.