Import PE offers on LC at sight, CFR Chittagong Port
Monsoon Season, Upcoming Eid Al-Adha Celebration Overshadow Outlook For PE Market In Bangladesh
- Import PE offers remain scarce
- Demand for end-products remains sluggish as monsoon season hits
- Near-term outlook remains bearish, domestic demand is projected to move lower
Bangladeshi market players voiced out to SSESSMENTS.COM that the ongoing monsoon season and upcoming Eid Al-Adha overshadow the outlook for PE market in Bangladesh in the near term. During the week, fresh import offers for August shipment were scarce, as some suppliers preferred to hold back until they have better clarity on market conditions before finalizing their pricing decision. For Indian cargoes, some buyers received import offers for LLDPE Film C4 via a global trading house at $960/ton on LC at sight, CFR Chittagong Port, with most transactions concluded at the initial offer level. As for Middle Eastern origin, an Emirati producer has yet to release fresh offers for August shipment to the Bangladesh market. Some sources mentioned that the producer will announce the offers within this week, with expectations of a rollover in prices as overall downstream consumption of HDPE and LLDPE grades in Bangladesh has shrunk in the wake of monsoon-induced floods, causing alarm among converters.
Bangladesh PE market has been improving consistently over the week, but the onset of the rainy season could stifle recovery. Some sources in Bangladesh claimed market sentiment is still leaning towards a more bullish tone this week. Since the business sector is steadily recovering after months-long closure, most banks in Bangladesh are now willing to issue Letter of Credit (LC). Previously, the trading of PE into Bangladesh was severely affected by difficulties in opening LC as banks were only allowed to operate with minimal manpower, with a few even shutting down the operation. However, most downstream factories in Bangladesh are still struggling to keep their operating rate at normal levels. Production at several manufacturers is running between 50-60% from the normal capacity amid falling export orders and rainy season. Further added, the heavy flood caused by continuous monsoon rains is worsening in some parts of Bangladesh, which could disrupt the supply chain. On the supply side, SSESSMENTS.COM was informed that supply from Middle Eastern and Indian producers remain sufficient this week.
On the pricing outlook, most market participants in Bangladesh expect that August shipment offers will be stable or even slightly moving up. Meanwhile, some sources expressed that Bangladesh's overall PE market outlook would remain bearish in view of slow sales amid monsoon season, coupled with the upcoming Eid Al-Adha holiday. SSESSMENTS.COM was informed that Eid Al-Adha holiday, an annual celebration in the Muslim calendar that takes place at the end of the Hajj pilgrimage, is expected to begin from July 30 and lasts until July 31. As the PE market outlook is predicted to continue its bearish streak in the near term, most buyers will source the materials on a hand-to-mouth basis only; hence, done deals for August shipment would remain limited.
Tags: Asia Pacific,Bangladesh,English,ISC,PE,Weekly
Published on July 23, 2020 2:16 PM (GMT+8)Last Updated on July 23, 2020 2:16 PM (GMT+8)
