Lower polyethylene production in Asia has failed to support the market due to weak demand, market sources said this week.
"There's no impact at all," a Chinese trader said. "The market is just too weak."
Indonesia's Chandra Asri on October 5 shut its petrochemical complex for a turnaround that is expected to last for 30-35 days. It has a 536,000 mt/year PE plant.
South Korea's Honam Petrochemical will also shut its 370,000 mt/year HDPE/LLDPE swing plant in Daesan for a 15-day turnaround starting October 15.
Its compatriot Hanwha Chemical will idle at least a third of its liner low density polyethylene production capacity for technical tests starting October 18, a company source said. It has a total production capacity of 335,000 mt/year of LLDPE.
Taiwan's Formosa Plastics is also operating at reduced rates of around 70-80% of capacity due to a lack of ethylene feedstock from its supplier Formosa Petrochemicals Corp. FPC's No. 3 steam cracker is expected to resume operations later this week from a turnaround that started mid-August.
Despite these shutdowns and supply cuts, the Asian PE market is still lackluster. While some market participants had expected demand to pick up after the week-long Chinese National holidays last week, buyers did not rush back into the market to restock.
Market sources attributed poor resin demand to uncertainty surrounding the eurozone sovereign debt issue and the global economy. This, they say, has affected export orders for finished plastic products in main markets like China and Vietnam. As a result, buyers are purchasing cargoes on a need-to basis, preferring to keep inventory low.
Asian PE prices fell across the board Monday amid weak buying sentiment and pressure on sellers to move cargoes. HDPE was assessed at $1,329/mt CFR Far East Asia, down $11/mt from Friday; LDPE was assessed at $1,449/mt CFR Far East Asia, down $16/mt from Friday; and LLDPE was assessed at $1,209/mt CFR Far East Asia, down $5/mt from Friday.
