- Customers were unable to complete any transactions due to payment issues
- Rebound in crude oil prices lifted market sentiment, but done deals remained scarce
- Outlook remains pessimistic
Market sources in Bangladesh revealed to SSESSMENTS.COM that market sentiment has started turning positive as crude oil prices have been rallying, citing an increase in the number of inquiries. However, import PE market continued to experience significant impacts from the outbreak through lockdowns in many major countries. Most banks in Bangladesh were not fully operational, even some already closed branches temporarily as the lockdown took a firm hold over the nation. Due to this circumstance, Bangladeshi customers were unable to complete any transactions as most local and national banks were unable to issue the Letter of Credit (LC). In the first week of May, the leading Indian petrochemical producer maintained a stable offer level for LDPE Film and LLDPE Film C4 grades to the Bangladesh market as compared to two weeks earlier. For Middle Eastern origin, import offers for LLDPE Film C4 cargoes were ranging between $780-800/ton on LC at sight, CFR Chittagong Port. However, customers had no intention to take the cargoes as most voiced out that their buy idea for Middle Eastern LLDPE Film C4 cargoes was at $700/ton with the same payment and delivery term, or between $80-100/ton lower than the initial offer level.
In the second week, spot PE offers remained scarce as buyers in Bangladesh have retreated to the sidelines due to market uncertainties. During the week, a global trading house was only offering Saudi and Taiwanese LLDPE Film C4 cargoes with prices maintained unchanged on a weekly basis at $800/ton and $840/ton respectively, on LC at sight, CFR Chittagong Port. In the second half of May, no fresh offers were available in the import market as a large number of Bangladeshi market players were away from their desks for Eid Al Fitr holiday, an annual Muslims celebration that marks the end of the month of Ramadan (fasting month).
On May 2, Bangladesh announced a two-week extension in ongoing lockdown against the Coronavirus pandemic until May 30, citing that the total number of confirmed cases rising to above 40,000-mark. Previously, the lockdown was set to expire on May 16. During the month, Bangladesh PE market faced a huge decline in demand for raw materials as the Coronavirus pandemic has set in motion a major economic crisis. Most buyers were withholding their cargo purchases due to payment issues and market volatility, while some traders preferred to hold back until they have better clarity on market conditions before finalising their offers. In the second half of May, activity in the Bangladesh PE market remained muted, with limited spot trades were taking place as the majority of market players were away from their desks for Eid Al-Fitr celebration. On the supply side, the availability of spot PE cargoes in the market remained sufficient for most of the month. Further added, the authorities in the country also ordered a shutdown of inter-district transport services during the Eid Al-Fitr holiday. However, the shutdown order will not apply to essential goods and emergency transport services.
Entering June, most sources in Bangladesh voiced out to SSESSMENTS.COM that PE prices will move up rapidly as crude oil prices have been relentlessly headed higher, however, the upward momentum will be short-lived considering the current market situation. Some sources doubted that trading activities will resume gradually after the holiday as concerns surrounding the economic fallout from the coronavirus will still weigh on the Bangladesh market.
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