- Buyers could not complete import transactions due to the Letter of Credit (LC) issue
- No improvement was seen in the Bangladesh PP market
- Bangladeshi market players expect the PP market to improve as lockdown has been lifted
At the beginning of May, the Coronavirus outbreak was heavily affecting the import PP market in Bangladesh. Buyers could not complete any transactions due to the Letter of Credit (LC) issue as most banks in Bangladesh were not fully operating amid the lockdown. In terms of offers, on the week commencing May 4, Indian and Omani producers trimmed import PP Homo Raffia offers by $20/ton on the biweekly comparison. Likewise, import offers for Saudi PP Homo Raffia decreased by $50-60/ton compared to the same period, SSESSMENTS.COM noted.
In contrast, import PP offers from foreign producers to Bangladesh moved higher in the second week of May. On a weekly comparison, SSESSMENTS.COM’s pricing database showed that offers for PP Homo Raffia of India origin increased by $10/ton, while offers for Saudi PP Homo Raffia via a global trading house were available at $30-40/ton higher. However, these offers gained a cold response from Bangladeshi buyers, as such, no deals were concluded. While on the week commencing May 18, market players were unbothered by the PP market movements due to Eid Al-Fitr holiday mood, which started from May 20, 2020. However, a global trading house managed to achieve deals for Middle Eastern PP Homo Raffia at $820/ton on LC at sight, CFR Chittagong Port. In the final week of May, PP market in Bangladesh was quiet as market players were still on Eid Al-Fitr Holiday.
Despite the rally in crude oil prices, no improvement was seen in the PP Bangladesh PP market during May. Demand continued to drop as the government announced an extension in ongoing countrywide lockdown until May 30. The PP market remained slow during the month in line with the slow end-products demand. Moreover, as mentioned before, as most banks in Bangladesh were not fully operating, not all buyers could open a Letter of Credit (LC). In the final week of the month, most buyers preferred to halt procurements to avoid high inventory near Eid Al-Fitr Holiday. On the supply front, no significant supply issues reported to SSESSMENTS.COM.
As the Bangladeshi government has lifted the lockdown and allowed businesses to reopen under strict guidelines as of May 31, the PP market in June is expected to gradually improve along with an expectation of better end-product demand onwards. Meanwhile, import PP prices to Bangladesh predicted to follow the international market trend, as cited by SSESSMENTS.COM.
Click below to view related stories and content on the Bangladesh PP market:
WeeklySSESSMENTS: Bangladesh PP Prices W/C May 4
