Asia MLLDPE supply constraints likely to persist in the near term


SINGAPORE (ICIS)–Supply of metallocene linear
low density polyethylene (MLLDPE) in Asia is
likely to stay constrained in the near term,
amid various regional outages and reduced US
imports.

Many international suppliers have already
wrapped up business with Chinese buyers before
the week-long Mid-Autumn and National Day
holiday in the country.

Offers for October shipment cargoes to the rest
of Asia remain firm, as suppliers sought higher
asking levels amid the lack of inventory
pressures.

Non-dutiable Singapore origin C6 (hexene-based)
MLLDPE cargoes were heard offered at
$1,150/tonne CFR (cost & freight) southeast
(SE) Asia in the week. Offers to India were at
$1,120/tonne CIF (cost, insurance and freight)
India Main Ports.

Several plants in southeast Asia were under
maintenance, with limited October shipment
volumes available for allocation.

Meanwhile, availability of US-origin materials
has also grown tighter over the past month.

The effects of previous shutdowns caused by
Hurricane Laura on supply were not immediately
felt in Asia, given that several US producers
had ready stocks available for allocation at
storage hubs in the region.

However, stock levels at these hubs and
warehouses have gradually dropped amid reduced
fresh replenishments from production sources in
the US.

Despite the snug supply, buyers were not in a
hurry to commit to spot purchases.

Some buyers in southeast Asia were holding onto
ample MLLDPE inventory and opted instead to
skip this month’s volumes.

“Given the high offer levels, we are focusing
on digesting on-hand stocks first before
committing to any fresh purchases,” a converter
based in southeast Asia said.

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Market players in India were optimistic that
demand is likely to stay healthy in October,
with a further uptick anticipated in the run-up
to the festive season.

However, many conceded that this year is likely
to see a more muted seasonal demand upswing
given prevailing pandemic-related concerns.

Focus article by Leanne
Tan



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