WeeklySSESSMENTS: SEA PP Prices Week Starting June 22

Author: SSESSMENTS

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Southeast Asian Market Players: Supply Hiccups To Provide A Safety Net For PP Prices Onward Despite Unimproved Demand

Local PP prices gain firmer footing from the limited supply
Slight improvement in demand observed in the Thailand market
Players foresee gloomy outlook for demand

Southeast Asian market players told SSESSMENTS.COM that supply hiccups will continue to provide a safety net for PP prices despite unimproved demand in the region. On the week starting June 22, local offers within the Southeast Asia market captured stable to firmer. In Thailand, offers for PP Homopolymer grades from one of the local PP producers raised between THB1,500-2,000/ton ($48-64/ton) on a weekly comparison. So far, no bids received as the supplier is still waiting for customers’ feedback. The supplier believes that only small buyers will make procurement this week since medium-to-big buyers are mostly still comfortable with their inventory or waiting for the upcoming arrival of low-priced materials purchased previously. Whereas in Malaysia and the Philippines, local offers for PP cargoes across different grades were stable from last week’s levels. In the import market, the number of transactions for PP cargoes remains limited this week. Detailed information for Indonesia and Vietnam market is available in WeeklySSESSMENTS of the respective countries.

As reported to SSESSMENTS.COM, demand for PP resins within the Southeast Asia market is still considered sluggish despite the slight improvement, particularly in Thailand. At the moment, the weak demand for resins is mainly linked with ample stock on converters’ end. In Thailand, the current ongoing demand is coming from converters’ orders that need to clear backlogs for sales since March or before the lockdown was imposed. For end-products, the demand for automotive and household products such as home appliances as well as houseware remains slow this week. While in the Philippines, weak demand for PP resins is associated with slow sales for finished products due to the impact of Coronavirus pandemic. Some converters said that demand for end-products is still below normal sales, no significant improvement observed for end-products sales except for several essential products such as food containers. Due to this, most converters are still running production at around 50% from the normal rate. However, the overall end-product sales in June are lots better than in May, the converters further added. On the supply side, tightness in PP supply persists in the region. On the plant news, Thailand IRPC’s 225,000 tons/year PP line No. 3 will resume production within this week, expected on June 26. Upon the completion of maintenance at PP line No. 3, the company’s 160,000 tons/year PP line No. 4 will be shut for maintenance purposes starting from June 29 and expected to be back on-stream on July 11.

Looking ahead, the majority of Southeast Asian market players contacted by SSESSMENTS.COM believe that local PP prices will remain firm in the near term despite the unimproved demand in the region. Citing that limited availability for PP cargoes will continue to lend a hand. Speaking of demand, market players in Thailand opined that demand is going to be very slow as the market is still severely affected by Coronavirus outbreak; demand for both PP resins and end-products are predicted to drop around 50% from the current demand.

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	972-1,009	30 Days Credit Term	Malaysia
Thailand	PP Homo Film	Offer Received	THB	36,000	1,162	Cash In Advance	Thailand
Malaysia	PP Homo Injection	Offer Given	MYR	4,030	941	30 Days Credit Term	Malaysia
Thailand	PP Homo Injection	Offer Received	THB	35,000-35,500	1,129-1,145	Cash In Advance	Thailand
Malaysia	PP Homo Raffia	Price List	MYR	4,080-4,130	953-965	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 Received	THB	35,000-35,500	1,129-1,145	Cash In Advance	Thailand