This week in Asia the polyethylene markets, especially HDPE, LDPE, and LLDPE, showed signs of fatigue. Prices nudged down in several markets, while many buyers pulled back, waiting for clearer signals after the upcoming festive breaks. The tension between ample supply (some of it driven by U.S.-origin and Middle Eastern cargoes) and tepid end-use demand is defining the mood.
Geopolitical risk continues to loom large. The Russia-Ukraine conflict is pushing crude and feedstock cost volatility back into view, even as hopes for a U.S. Federal Reserve rate cut have begun to support outlooks for demand. But those hopes have not translated into strong buying so far. In China, domestic HDPE prices remain soft, shrinking the import arbitrage margin and reducing overseas shipment appeal. Buyers appear more interested in forward purchases at lower premiums rather than spot cargoes.
Supply remains far from tight. New and restarted capacities across the region are keeping inventory levels up, while competitive shipments from the U.S. and Iranian material are putting downward pressure on pricing. Downstream converters are generally cautious, many already with large stocks, others postponing refreshes until the post-holiday period.
In India, weak consumption is being compounded by the rupee’s slide, which is making imports more expensive. Victory of domestic discounts has convinced many buyers to use local suppliers rather than chase import offers. Holiday-season slowdowns caused by rain, flooding, and typical production pauses have also added to slack demand. Similarly in Pakistan, Sri Lanka, Bangladesh, and Southeast Asia, trading volumes are light; buyers are largely in observation mode until after key festivals.
Looking ahead, we expect the market to stay muted in the short term. Price shifts will likely stay within narrow bands, maybe USD 5-10/ton on HDPE grades, unless there’s a spark: either a sudden supply disruption, sharper feedstock cost changes, or a pickup in downstream demand post-festival. For now, the prevailing strategy among market participants is one of caution, minimal spot exposure, and close watching of macro signals.
