- Local PP prices were stable to softer during February
- Import PP offers recorded a significant reduction by the second half of the month
- Weak buying sentiment amid intensified Coronavirus concern would put pressure on PP prices
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Southeast Asia’s domestic PP market began February with a stable to firmer price trend, SSESSMENTS.COM noted. On the week commencing February 3, offers for PP across all grades from local producers in Thailand maintained stable from the prior week while local PP offers in Malaysia inched higher between MYR120-180/ton ($28-43/ton) on a monthly comparison. A firmer price trend also captured in Indonesia and Vietnam market, as explained in detail in WeeklySSESSMENTS of the respective countries. As the month progressed, local PP offers within Southeast Asia market started to show decreases. By the second week, offers for PP across all grades from Thai local producers edged down by THB500/ton ($16/ton) while offers for PP Homo Film via traders in Malaysia dropped by MYR50-100/ton ($12-24/ton) from a week earlier on the back of slack demand. On the final week of February, a local PP producer in Thailand cut its offers by another THB500/ton ($16/ton) while local PP offers in Malaysia remained stable on a weekly comparison. In the Philippines, PP offers from the local producers maintained stable during February.
In the import market, PP offers to the region captured mostly on a downtrend throughout February.
For Middle Eastern cargoes, the most significant reduction captured on the week ending February 28. In that particular week, import offers for Saudi PP Homo Raffia cargoes to Vietnam surfaced with a reduction of up to $50/ton on weekly comparison on the back of sluggish demand. In contrast, offers for Chinese PP Homo Raffia cargoes to Vietnam via traders up between $10-30/ton on weekly comparison following the relatively stable local offers in China. However, the upward adjustment met resistance from buyers due to lower import offers to the Southeast Asia market in general. For Southeast Asian cargoes, March shipment offers for PP Homopolymer grades of Malaysia origin to Philippines reported down by $20/ton from February shipment’s level. Meanwhile, March shipment offers from a Singaporean producer to the region dropped by $70/ton for PP Homo Raffia and by $50/ton for PP Block Copolymer and PP Random Copolymer as compared to February shipment. For India origin cargoes, SSESSMENTS.COM noted a decrease of $50/ton in total during the month on import offers for re-export PP Homo Raffia cargoes from China.
Overall, demand for PP resins within the region was sluggish during February. Sufficient inventory on-hand coupled with slow sales for their end products had hindered converters from replenishing raw materials. Additionally, the expectation of lower polymers prices amid the growing concern over Coronavirus issue had also put converters and traders to the sidelines. Most buyers were not confident to stock up and preferred to keep an eye on market development before making procurement decisions. On the supply side, Thai PP producers reported having tight supply but no significant impact reported by market players to SSESSMENTS.COM as the overall demand in Thailand was subdued due to weak economic condition. In Malaysia, the upcoming turnaround maintenance at Lotte Chemical Titan’s whole petrochemical complex, which is expected to start in early March for around 25-45 days reported would not affect local supply as the producer will slash its allocation to export market.
On the production sector, Thai HMC has shut its PP line no.3 with a production capacity of 360,000 tons/year on February 26 for 20-day turnaround maintenance. Additionally, Thai HMC will also shut its 400,000 tons/year PP plant for maintenance and debottlenecking projects in May for about 2-3 months. In Indonesia, Pertamina has planned to shut its 24,000 tons/month propylene cracker for maintenance work starting from March 18 until April 24. A source with knowledge of the matter told SSESSMENTS.COM that Polytama Propindo will also most likely to shut its 300,000 tons/year PP unit with a similar schedule.
Looking into March, most market players opined that local and import PP offers would remain on a downtrend. The weak buying sentiment amid intensified Coronavirus outbreak globally might impede improvement in demand in the days to come, which in turn will create difficulties on sellers’ end in moving out cargoes. Hence, prices are predicted to be under pressure, SSESSMENTS.COM was told.
*Re-export from China
*Re-export from China
