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QuarterlySSESSMENTS: Q2 2020 Pakistan PE Prices

Author: SSESSMENTS

  • Movement in import PE offers could not offset by demand
  • Increase in demand only recorded for essential packaging product amid coronavirus outbreak
  • Q3 outlook depends on coronavirus severity 

SSESSMENTS.COM data showed a disproportion on price movement compared to demand in the Pakistan PE market as coronavirus wreaking havoc in Q2 2020. In the first half of April, Middle Eastern producers released offers for HDPE Film and LLDPE Film C4 at $760/ton and $750/ton respectively. These offers were down by $100/ton compared to March shipment offers. Although market players opted to sideline throughout the month, the increase in PE offers was then recorded at the end of the month. The leading Saudi polyolefins producer informed traders that HDPE Film and LLDPE Film C4 offers were up between $30-50/ton on the monthly comparison. The trader mentioned that the increase was due to limited allocation on the producer's side. On the contrary, US cargoes were offered lower compared to April shipment with HDPE Blow Moulding sold at $750/ton, or $50/ton lower compared to offers a month earlier.

Moving to May, a Saudi producer announced shipment offers to the Pakistan market in the first week with a reduction of $60-130/ton for HDPE grades and $130/ton for LDPE Film as compared to the March shipment price list. In the following week, a United Arab Emirates producer announced May shipment offers to the Pakistan market with a reduction of $10-20/ton for HDPE Film, LDPE Film, and LLDPE Film C4. In the second half of May, SSESSMENTS.COM’s pricing database showed that no fresh offers were available in the import market as the majority of Pakistani market players left their desks for Eid Al-Fitr holiday which falls on May 22 and lasts until May 27 this year.

In the week commencing from June 1, a Saudi producer announced June shipment offers to the market with a price increase of $30/ton for HDPE Blow Moulding, while maintaining a stable offer level for LDPE Film and HDPE Pipe cargoes compared to a month earlier. Moving to the third week of the month, an Emirati producer applied a price increase of between $40-50/ton for HDPE Film, LDPE Film, and LLDPE Film C4 for June shipment. Some traders reported receiving import LLDPE Film C4 offers of US origin at $70/ton higher than offers available in early June. In the final week of June, the leading Saudi polyolefins producer initiated a price increase for July shipment between $60-90/ton for HDPE Film, LDPE Film, and LLDPE Film C4 as compared to May shipment. SSESSMENTS.COM noted that most foreign producers found difficulties securing deals as buyers resisted import offers which perceived as too high.

Speaking about demand in April, suppliers did not have any choice but to follow negative market sentiment amid lockdown. While the lockdown period in Pakistan has been extended until the end of April, the government allowed essential and export-focus manufacturers to operate. The Pakistani government then opted to lift lockdown restrictions entirely from May 9 with the entire economy sector restarting their activities. Option to lift a mass-scale lockdown seems working in that time with market sentiment turning positive and deals can be conducted in the first half of May. In the second half of May, activity in the Pakistan PE market was stopped by design as the majority of Pakistani market players signed off for Eid Al-Fitr holiday. Coming into June, SSESSMENTS.COM noted that the whole plastic and chemical industry has a concern not having a clear picture going forward as Pakistan introduces “smart lockdown” policy due to resurgence of coronavirus cases. With the “smart lockdown” policy, areas identified as “hotspot” will be sealed off from June 16 while general activities keep continuing. Further added, most converters in Pakistan have been showing stiff resistance towards the higher prices since a large number of suppliers maintained their high price quotes to the market on the back of firmer feedstock prices. On the production front, several manufacturers have seen a significant increase in demand for food and beverages, medical supplies packaging amid coronavirus outbreak, while sales for other products continued to limp along. In June, some downstream factories kept running at 60-70% from the normal production capacity. No significant supply issues were reported to SSESSMENTS.COM during the quarter.

A weak performing market led to a pessimistic view among Pakistani players for Q3 2020 market outlook. The majority of market participants believe that buying sentiment is likely to remain bearish as buyers pose a strong resistance towards higher import offers amid strong energy market and firm monomer prices, given ample inventory and consistently sluggish downstream demand. Some sources expressed that the market would largely take cues from the domino effect of forthcoming challenges on the back of the second wave of coronavirus outbreak, SSESSMENTS.COM was informed.

Range of import PE transactions in April on LC at sight, CFR Karachi Port

OriginProductTransaction TypeOffers (USD/ton)
North AmericaHDPE Blow MouldingPurchased750
Middle EastHDPE FilmOffer Received760-800
Southeast AsiaHDPE FilmOffer Received720
Middle EastLDPE FilmOffer Received850
Middle EastLLDPE Film C4Offer Received750-820

Range of import PE transactions in May on LC at sight, CFR Karachi Port

OriginProductTransaction TypeOffers (USD/ton)
Middle EastHDPE Blow MouldingPrice List780
North AmericaHDPE Blow MouldingPurchased750
North AmericaHDPE Blow MouldingSold750
Middle EastHDPE FilmPrice List790
Middle EastHDPE FilmOffer Given730-740
Middle EastHDPE FilmSold740-750
Middle EastHDPE Pipe Black(100)Price List950
Middle EastHDPE Pipe Blue (100)Price List1,100
Middle EastHDPE Pipe Orange (100)Price List1,100
Middle EastLDPE FilmOffer Given830
Middle EastLDPE FilmPrice List880-900
Middle EastLDPE FilmSold810-820
Middle EastLLDPE Film C4Offer Given800
Middle EastLLDPE Film C4Sold750-760
North AmericaLLDPE Film C4Sold*730
Description: *June-July shipment offers

Range of import PE transactions in June on LC terms, CFR Karachi Port

OriginProductTransaction TypeOffers (USD/ton)Payment Term
Middle EastHDPE Blow MouldingOffer Given*850LC at sight
Middle EastHDPE Blow MouldingOffer Received810LC at sight
Middle EastHDPE Blow MouldingOffer Received*890LC 90 days
Middle EastHDPE Blow MouldingPrice List810LC at sight
Middle EastHDPE FilmOffer Received860-950LC at sight
Middle EastHDPE FilmSold790-800LC at sight
Middle EastHDPE InjectionOffer Received810LC at sight
Middle EastHDPE InjectionPrice List810LC at sight
Middle EastHDPE Pipe Black(100)Offer Received950LC at sight
Middle EastHDPE Pipe Black(100)Price List950LC at sight
Middle EastHDPE Pipe Blue (100)Offer Received1,100LC at sight
Middle EastHDPE Pipe Blue (100)Price List1,100LC at sight
Middle EastHDPE Pipe Orange (100)Offer Received1,100LC at sight
Middle EastHDPE Pipe Orange (100)Price List1,100LC at sight
Middle EastLDPE FilmOffer Received880-960LC at sight
Southern AfricaLDPE FilmOffer Received*980LC 90 days
Middle EastLDPE FilmPrice List880-900LC at sight
Southern AfricaLDPE FilmPrice List980LC at sight
Middle EastLDPE FilmSold850-860LC at sight
Middle EastLLDPE Film C4Offer Received850-920LC at sight
North AmericaLLDPE Film C4Offer Received850LC at sight
Southern AfricaLLDPE Film C4Offer Received*860-880LC 90 days
Southern AfricaLLDPE Film C4Price List860-880LC at sight
Middle EastLLDPE Film C4Sold*820-870LC at sight
Southern AfricaLLDPE Film C4Sold*840LC at sight
Description: *July shipment offers

Tags: Asia Pacific,English,ISC,Pakistan,PE,Quarterly

Published on July 8, 2020 8:14 PM (GMT+8)
Last Updated on July 8, 2020 8:14 PM (GMT+8)