Market Players: Supply Condition Will Continue To Support PP Prices And Demand In Southeast Asia
- July shipment PP offers from an Emirati producer will be announced between June 20 to June 25
- PP supply in Southeast Asia is limited
- Market players express different outlook for PP pricing
Southeast Asian market players believe that supply condition will continue to support PP prices and demand in the region. As informed to SSESSMENTS.COM, in Thailand, a local producer adjusted up PP offers across all grades by THB500/ton ($16/ton) compared to last week on the back of limited supply at the producer’s end. However, the current offers are deemed too high and unworkable. Moreover, only small converters are willing to accept such a level, while big converters mostly still have sufficient inventory on hand or waiting for delivery from previous procurements. Meanwhile, from the trader’s end, this week, PP Homo Injection and PP Homo Raffia offer via a trader are available at THB30,500/ton ($980/ton) on cash, FD Thailand basis and excluding 7% VAT, THB3,500/ton ($112/ton) lower than the local producer’s offers. Still, despite the lower offers, deals for these cargoes remain limited. In Malaysia, a local trader stated that the company no longer has the allocation for June delivery due to the shortage of supply at the supplier’s end. In the import market, PP offers remain scarce since last week, July shipment offers from an Emirati PP producer have yet to come out as the producer plans to announce the offers between 20th to 25th of this month. Detailed information for Indonesia and Vietnam market is available in WeeklySSESSMENTS of the respective countries.
The overall demand in Southeast Asia remains slow over the week. Most countries in the region are still slowly recovering from the Coronavirus pandemic impact. In Thailand, buyers are not in a rush to make procurements due to sufficient inventory on hand. Moreover, most of them are still waiting for delivery from previous procurements when the PP prices were low. A jumbo bag manufacturer even plans to reduce production rate in July to 50-60% from normal production. In contrast, in Malaysia, PP demand has started to improve in line with healthy finished product demand from the domestic and export market such as Australia. On the supply side, SSESSMENTS.COM was informed that overall PP supply in the region is rather tight. On the production front, Thailand IRPC’s PP line No. 3 with a capacity of 225,000 tons/year has been under maintenance shutdown since Friday (June 12) and expected to be back on-stream on June 26. While maintenance work at the company’s PP line No. 4 with a capacity of 160,000 tons/year will be conducted on June 29 and is expected to resume on July 11.
Majority of market players predicted the tight supply will continue to support the ongoing demand and firm PP prices in Southeast Asia. However, a Thai trader opined that local PP prices in the country will drop in the near term as the prices increased sharply in the last few weeks while responses from buyers remain negative, as stated to SSESSMENTS.COM.
Local PP offers on FD basis, excluding VAT (PHP term including 12% VAT, all equivalent in USD excluding VAT)
| Origin | Product | Transaction Type | Currency | Offers/ton | Equivalent in USD/ton | Payment Term | Delivery Country |
|---|
| Malaysia | PP Block Copolymer | Price List | MYR | 4,160-4,320 | 973-1,010 | 30 Days Credit Term | Malaysia |
| Thailand | PP Homo Film | Offer Given | THB | 35,500 | 1,140 | Cash In Advance | Thailand |
| Thailand | PP Homo Film | Offer Received | THB | 34,500-35,000 | 1,108-1,124 | Cash In Advance | Thailand |
| Malaysia | PP Homo Injection | Offer Given | MYR | 4,030 | 943 | 30 Days Credit Term | Malaysia |
| Thailand | PP Homo Injection | Offer Given | THB | 30,500 | 980 | Cash In Advance | Thailand |
| Thailand | PP Homo Injection | Offer Received | THB | 33,500 | 1,076 | Cash In Advance | Thailand |
| Thailand | PP Homo Injection | Sold | THB | 30,500 | 980 | Cash In Advance | Thailand |
| Malaysia | PP Homo Raffia | Offer Given | MYR | 4,080-4,130 | 954-966 | 30 Days Credit Term | Malaysia |
| Philippines | PP Homo Raffia | Offer Received | PHP | 60,000-62,000 | 1,068-1,103 | 60 Days Credit Term | Philippines |
| Thailand | PP Homo Raffia | Offer Given | THB | 34,500 | 1,108 | Cash In Advance | Thailand |
| Thailand | PP Homo Raffia | Offer Received | THB | 33,500 | 1,076 | Cash In Advance | Thailand |
| Thailand | PP Homo Raffia | Offer Received | THB | 33,500 | 1,076 | 30 Days Credit Term | Thailand |
| Thailand | PP Homo Raffia | Sold | THB | 30,500 | 980 | Cash In Advance | Thailand |
Tags: Asia Pacific,English,PP,SEA,Weekly
Published on June 17, 2020 2:06 PM (GMT+8)
Last Updated on June 17, 2020 7:00 PM (GMT+8)
