Report for China & South East Asia

The following table shows recent prime prices taken from China’s major virgin polymer platforms, inclusive of VAT and quoted in Renminbi (RMB) which has an exchange rate of 7.1815 to the US dollar at the time of writing:

While crude oil and upstream feedstock prices surged during June, prime resin prices in China saw only modest increases ranging mostly between RMB 100 and 250 per tonne; the exception was bottle-grade PET which rose by around RMB 400 per tonne.

The relatively muted response in resin pricing reflects ongoing weakness in downstream demand, inventory pressure and the limited ability among producers to pass on costs. Feedback from traders and converters in Vietnam, Hong Kong and Malaysia suggests that speculative restocking remains rare, and most buyers are purchasing only on a need-to basis. In terms of late-June market dynamics for prime resins in China, ABS prices rose from RMB 9100 to RMB 9250 per tonne in response to higher costs, although actual demand remained soft. Consumption by the appliance and electronics sectors has yet to recover meaningfully. A key 600,000 tonnes per annum plant remains under maintenance, offering some support on the supply side. However, most buyers remain hesitant and transactions are still limited. Market participants expect prices to remain range-bound unless downstream activity improves.

Polystyrene prices increased to RMB 7800 per tonne in late June from RMB 7600 two weeks earlier. Cost support from styrene and crude oil remains firm, but downstream sectors such as packaging and consumer goods continue to be sluggish. Market activity is cautious, with traders mainly offering stable to slightly firmer quotes. Without clear signs of consumption growth, any further upside is expected to be limited.

Polyethylene (PE) prices rose to RMB 7150 per tonne in late June from RMB 6900, with LDPE grades seeing the strongest gains. But according to a PE trader in southern China, demand remains weak despite the price uptick. Maintenance shutdowns have kept supply balanced in the short term but buyers scaled back in June after restocking earlier in the month. Without stronger end-use demand, prices are likely to stabilise at current levels.

Polypropylene prices recovered to RMB 7200 per tonne from RMB 7070 earlier in June. Stronger propylene costs supported these gains but actual market performance remains muted. Traders report continued high inventories and limited interest from converters, particularly in the woven and injection sectors. With weak seasonal demand and new capacity expected online shortly, most believe the price uptrend is unlikely to be sustained.

PMMA prices remained stable at RMB 13,700 per tonne, having risen by RMB 300 earlier in June. The market lacks upward momentum owing to weak demand from optical and signage-related sectors. Feedstock MMA costs have increased more sharply and thus squeezed margins. Several producers are evaluating output cuts as buyers resist higher offers. Market sentiment remains flat, with little room for further upside in the near term.

Polycarbonate (PC) prices have been flat at RMB 9900 per tonne. Despite strong upstream volatility in crude and BPA, sluggish demand from the electronics and construction sectors continues to weigh on the market. Sellers are reluctant to raise offers amid slow transactions and cautious buyer sentiment, with deals mostly involving small volumes. Unless demand picks up or inventories tighten, PC prices are expected to remain in a narrow range.

POM prices edged up to RMB 8400 per tonne towards the end of June, gaining around RMB 200 over the previous two weeks. But demand remains weak, particularly in the electronics and automotive component sectors. Market resistance to higher prices is evident, with most traders reporting limited inquiries even after feedstock cost increases. Without a pick-up in end-user activity, further price hikes are unlikely to gain traction.

As mentioned above, PET bottle chip prices gained some RMB 400 to reach RMB 6260 per tonne towards the end of June. The market has been supported by firmer PTA and MEG costs, along with expectations of tighter supply owing to planned production cuts. However, downstream demand from beverage bottlers remains tepid, and export activity is weak. Most transactions involve small volumes, with buyers hesitant to commit to larger orders.

PVC prices ticked up slightly towards the end of June on stronger ethylene and carbide values, but fundamentals remain weak. Inventory pressure continues owing to slow demand from the real estate and infrastructure sectors. Additionally, buyers are cautious ahead of potential policy changes in India and uncertainty in export orders. Most producers are maintaining offers, but upside potential is likely to remain limited unless demand improves substantially.

Overall, the rebound in oil and feedstock costs in June was not matched by equivalent gains in prime resin prices in China. Weak end-user demand, high inventories and buyer caution have kept market sentiment subdued. While cost-side pressure is providing some floor to pricing, the upside remains constrained without a clear improvement in downstream activity. Most market participants expect prices to remain stable to slightly firm.

Meanwhile, the recycled pellets market across Asia continues to deteriorate, with widespread reports of full warehouses, production cuts and halted procurement. In Malaysia, multiple recyclers of HIPS and ABS pellets confirm they have suspended most incoming purchases owing to a near standstill in downstream orders. According to a long-time customer specialising in recycled HIPS and ABS, their downstream compounding clients have instructed them to cease all deliveries immediately. Similar feedback has come from other facilities too.

The market remains weak for both fibre- and bottle-grade recycled PET, compounded by increased logistics costs for exporting flakes to the USA and Europe. According to a US-based PET buyer, prices have dropped sharply from USS 1200 to US$ 950 per tonne CNF, with recent purchases finalised at below US$ 800 per tonne FOB. While the price of prime PET has risen, the recycled segment has seen no comparable benefit, with most market players suggesting the price gap has narrowed to uneconomic levels.

Faced with rising inventories and few outlets for recycled pellets, many recyclers have reduced feedstock price offers to their scrap suppliers. However, most suppliers have not accepted the lower levels, indicating a lack of profitable feedstock options in the market. The same dynamics can be observed in the markets for recycled PE, PP, PC, PMMA and nylon, where extremely limited downstream demand has resulted in a build-up of recycled pellets.

Unless there is a meaningful improvement in downstream demand or policy clarity that revives trade confidence, the recycled pellet market is likely to remain in deep distress.

The scrap plastics market in Malaysia was brought to a virtual standstill amid tightening import regulations and widespread uncertainty ahead of the new control regime taking effect on July 1. Recyclers, traders and suppliers are all reporting minimal or no movement of plastic waste, particularly for LDPE film, PET bottles, rigid polyolefins and engineering plastics, as well as PS and ABS.

The Malaysian government has introduced a new compliance framework under SIRIM’s Certificate of Approval (CoA) system, replacing the previous AP regime. This includes stringent pre-shipment inspection requirements, mandatory documentation (including bank guarantees and tariff classification letters), and enforcement of detailed material specifications such as a minimum 99.5% homogeneity for single-polymer shipments and near-zero tolerance for oil, leachate or mould contamination.

Furthermore, Malaysia has banned all plastic waste imports from the USA, citing the country’s non-party status under the Basel Convention. This move has significantly disrupted supply chains, particularly for US-origin LDPE film and PET bottle bales, which had previously accounted for a significant share of imports into South East Asia.

Recyclers are now required to: ensure full compliance with CoA procedures; submit to detailed inspections (either at origin or at a local yard); and provide financial assurances, such as bank guarantees, covering return logistics for non-compliant shipments. These new requirements, combined with mandatory electronic invoicing, have raised operating costs and added complexity to import procedures. Many recyclers are now suspending imports altogether owing to uncertainty over whether shipments will clear inspection or face costly re-export.

With scrap inventories building up at ports and yards and with no clear guidance as yet on the enforcement discretion or timeline of Malaysia’s new system, the market for imported plastic waste has effectively frozen. Unless clarity improves and some regulatory relief is granted, both importers and overseas suppliers will remain unable to execute trades or to shift material.