- Buyers’ acceptance level for import offers changed in a particular week
- Demand was still heavily affected by the Coronavirus pandemic
- Import PP offers predicted to move further up following the international trend
In the first week of June, import PP offers to Bangladesh had broken a new threshold level as the market awakened from the Eid Al-Fitr holiday. A global trading house told SSESSMENTS.COM that there were no offers below $900/ton-threshold to Bangladesh during that week. Import PP Homo Raffia offers of India And Saudi origin were available between $900-920/ton, or $60/ton higher compared to offers before Eid Al-Fitr holiday. Moving to the second week, buyers’ acceptance level for Middle Eastern PP Homo Raffia cargoes changed from $900/ton-level to $880/ton-level following the weakened demand. For Southeast Asian cargoes, a global trading house received import PP Homo Raffia offers from Indonesia at $950/ton for July shipment. All offers on LC at sight, CFR Chittagong Port.
On the week commencing June 15, import offers for PP Homo of Vietnam origin to Bangladesh went up by $20/ton. Likewise, the offers for import PP Homo Raffia cargoes from the leading Indian petrochemical producer also increased by $20/ton. Both on the week-on-week comparison. A week after, a global trading house was offering PP Homo Raffia cargoes of India and Middle East origin at $940/ton and $960/ton, respectively. In response, most buyers were reluctant to take the cargoes and preferred to wait for more fresh offers from other suppliers. During the second half of June, no deals were reported. Some sources in Bangladesh also mentioned that an Emirati producer will announce its July shipment offers to the market by Thursday, July 2. All offers on LC at sight, CFR Chittagong Port, SSESSMENTS.COM noted.
As reported to SSESSMENTS.COM, demand for PP resins was sluggish almost throughout June as the market was still highly affected by the coronavirus pandemic. After the coronavirus-related lockdown in the country was relaxed on May 31; which allowed stores and malls to reopen with limited operational hours, the number of orders for raw materials have started to show a slight improvement. To support economic activity, as per Tuesday, May 9, the government divided the areas into three zones (green, yellow, and red) based on how severe the virus transmission was in each area. However, most converters were not ready to run the production at a high rate as the demand for finished products remained sag. Moreover, buyers were very cautious as the number of confirmed coronavirus cases in Bangladesh continued to increase. Amid the relentless rising cases of coronavirus, a week after the lockdown was lifted, the Bangladeshi government decided to impose area-wise lockdowns in capital Dhaka and other regions alongside the movement restrictions that also extended until June 30. Due to this, buying sentiment has further deteriorated and more market players refrained from replenishing stocks and preferred to adopt a wait-and-see stance. On the production side, long periods of lockdown have severely affected the manufacturing sector. Following the re-imposed lockdown, some manufacturers were running at a reduced rate of 50% from the normal output, while others have been forced to halt the production activities. No supply issue was reported by market players during June as demand remained dull.
Looking into July, the majority of market players contacted by SSESSMENTS.COM voiced out that the re-imposed lockdowns will further weaken the economy, leading to a significant drop in demand. On the other hand, players expressed that import PP offers to Bangladesh will most likely to increase further following the international market trend.
