Malaysia to remain net importer of HDPE, LDPE, synthetic rubber on strong local demand

Nurluqman Suratman

06-Jun-2023

SINGAPORE (ICIS)–Malaysia is expected to remain a net importer of ethylene derivatives and synthetic rubber in the coming years on the back of strong growth in domestic demand, according to the country's petrochemical association.

The southeast Asian country has been a net importer of high density polyethylene (HDPE) and linear low density PE (LLDPE), with net combined imports reaching 530,000 tonnes in 2022, primarily from Singapore, Saudi Arabia, Thailand, and Indonesia to meet domestic demand, the Malaysia Petrochemical Association (MPA) said in a report.

While the start-up of Pengerang Refining and Petrochemical's (PRefChem) PE units is expected to ease the trade deficit, the country will remain a net importer for HDPE and LLDPE in the coming years due to domestic demand for films and sheets.

The start-up of PRefChem's facilities adds 400,000 tonnes/year of HDPE and 350,000 tonnes/year of LLDPE, according to the ICIS Supply & Demand Database.

Malaysia's overall imports for LLDPE is expected to fall to 210,000 tonnes/year in 2027 from 340,000 tonnes/year last year.

HDPE imports are expected to fall to 90,000 tonnes in 2027 from 190,000 tonnes in 2022.

As for low density PE (LDPE), no new capacity additions are expected in the near term and Malaysia is expected to maintain its net export position.

Malaysia's imports of LDPE are expected to fall to 120,000 tonnes in 2027 from 190,000 tonnes in 2022.

SYNTHETIC RUBBERS IMPORTS TO GROW Malaysia is also a net importer of synthetic rubber, similar with most other southeast Asian countries.

The country relies heavily on imports of synthetic rubber across all key types, with a significant dependence on imports of nitrile elastomers, which totaled 430,000 tonnes in 2022.

Majority of these imports were sourced from Asia-Pacific countries such as South Korea and Japan.

"However, there are ongoing efforts to expand domestic production capacity to meet the growing demand," the MPA said.

Malaysia's PETRONAS and South Korea's LG Chemical have started construction of a new joint venture nitrile butadiene (NBR) latex plant in Johor, Malaysia which is expected to start operation in 2023, the industry association said.

The new plant will have a capacity of 200,000 tonnes/year and aims to meet domestic demand for glove manufacturing.

Despite the capacity addition, domestic demand for NBR latexes in Malaysia is growing at an average annual rate of around 5%, indicating that a significant portion would still need to be met through imports.

"The demand for synthetic rubber has structurally increased post-pandemic, with major shifts in consumer attitudes towards health driving increased demand for synthetic rubber for glove production beyond healthcare settings," the MPA added.

The report by the MPA was released on 5 June following the Asia Petrochemical Industry Conference (APIC) which was held in New Delhi, India, on 18-19 May.

Focus article by Nurluqman Suratman

Thumbnail image: Malaysia Petrochemical Association (MPA) president Akbar Thayoob in his keynote speech at the Asia Petrochemical Industry Conference (APIC) 2023 in New Delhi on 19 May 2023. (By Pearl Bantillo)

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