News Code : 43728

Petrotahlil :Data from ChemOrbis Price Index suggest that local HDPE and LLDPE film prices in the Philippines have plunged to their lowest levels not seen since November 2008 as the market has extended its losses into the last month of the year.

Amid the ongoing downtrend, PE players have started to discuss the January outlook which is being dented by rising supply levels and persistently limited purchasing activity.

December starts with fresh price cuts

Traders in the Philippines reported that local LLDPE and HDPE film prices witnessed additional decreases in the first week of December given the continuing downward pressure. On a week over week comparison, the price ranges were visibly down by around PHP3000-4000/ton ($59-78/ton).

The weekly averages of LLDPE and HDPE film prices on FD Philippines basis, meanwhile, have posted cumulative declines of 17% and 19%, respectively, when compared to late June levels, as can be observed in the graph below.

Abundant supply for import origins

An end-product manufacturer said, “HDPE and LLDPE prices keep moving lower as the market remains under pressure from rising overseas supplies. We have received quite attractive offers for several different origins this week while deep-sea US cargoes are also being offered aggressively.”

On the sellers’ side, a few traders commented that buyers preferred to stay sidelined amid ample availability.

“Normally year-end demand would pick up, but seems like it won’t be so this year. Buyers believe that prices still have room for further drops owing to the supply pressure. Considering the current state of supply and demand, we are feeling bearish about the January outlook,” one of them said.

Domestic availability to rise

In addition to mounting import supplies, players also expect the domestic availability to increase in the upcoming weeks in line with JG Summit’s impending plant restart.

JG Summit Petrochemical is reportedly planning to resume operations at its PE unit by around mid-December. The 325,000 tons/year HDPE/LLDPE plant was shut for maintenance in October.

“The absence of the local producer hasn’t led to a supply crunch in the market as buyers have been perfectly able to cover their needs from abundant import sources. Yet the producer’s return may add to the supply length,” noted a trader.

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