Import PE Film Premiums Between SEA, China Widen to Multi-Month Highs

Following the Lunar New Year holiday, polyethylene (PE) markets in China and Southeast Asia have taken divergent paths, leading to a significant widening in regional price premiums.

In China, PE prices were largely stable during the first trading week after the holiday. Import sellers maintained firm offers, supported by limited import availability and expectations of post-holiday restocking. However, high domestic inventories, slow downstream restart rates, and some losses in futures markets capped further upside momentum.

In contrast, Southeast Asia’s import PE market reopened on a bullish note. Tightening supply conditions and strong sentiment supported price increases of up to $60/ton. As a result, LDPE and LLDPE film prices climbed to over five-month highs, while HDPE film reached its strongest levels since late April 2025, according to ChemOrbis data. Although transactions remained uneven in parts of the region due to extended holiday slowdowns, overall sentiment strengthened more visibly than in China.

Consequently, the premiums between PE film grades in Southeast Asia and China expanded to multi-month highs, reflecting increasingly divergent supply-demand balances across the two regions.

LDPE and LLDPE Spreads Near $100

Data from the ChemOrbis Price Index indicates that price gaps between Southeast Asia and China for LDPE and LLDPE film have been relatively wide since late December 2025, but widened further by late February.

The LDPE film premium rose to $85/ton — the largest since the second half of April 2025 — while the LLDPE film premium reached $90/ton, the widest since the latter half of August 2025.

The growing arbitrage gap could enhance Southeast Asia’s appeal for Middle Eastern producers seeking stronger netbacks, potentially encouraging greater allocations to the region over China. This shift comes as China continues to face elevated post-holiday inventories and a slower demand recovery.

At the same time, the near-$100/ton gap may reopen limited arbitrage opportunities for re-exports from China into neighboring Southeast Asian markets. However, the viability of such flows will depend on freight rates and the pace of demand recovery in Southeast Asia. If downstream consumption fails to strengthen meaningfully, sustaining these wider premiums may become challenging despite current supply tightness.

HDPE Film Premium Re-Emerges in Southeast Asia

The HDPE film market followed a different trajectory. After trading at parity in early November 2025, the China–Southeast Asia gap remained within a narrow $10–15/ton range for several months before disappearing entirely in early February, when average prices aligned at approximately $905/ton CIF.

Post-holiday gains in Southeast Asia shifted this balance. Supported by fresh price hikes and firmer sentiment, the region’s HDPE film market regained a $40/ton premium over China — the widest differential since mid-August 2025, according to weekly averages from the ChemOrbis Price Index.

While this rebound confirms a clearer regional premium structure, the current spread remains insufficient to trigger strong re-export activity from China, particularly amid cautious buying interest in parts of Southeast Asia.

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