- Pakistan lifted lockdown amid a jump in virus cases
- Market players were away from their desks for Eid Al-Fitr holiday
- Most producers reduced May shipment offers
In May, crude oil prices have been rallied as more countries begun reopening their economies from weeks of coronavirus-led lockdowns coupled with supply cuts’ agreement from the oil producers. Despite the rally in crude oil prices, Pakistan PE market has not shown any signs of recovery in the first week of May due to growing concern over demand slowdown amid pandemic crisis. Amid a month-long lockdown, a Saudi producer announced May shipment offers to the Pakistan market. The producer initiated a price reduction of between $60-130/ton for HDPE grades and $130/ton for LDPE Film as compared to the March shipment price list. All offers were for purchases above 99 tons, and valid until May 9, 2020. In the following week, a United Arab Emirates producer also announced May shipment offers to the Pakistan market. As compared to April shipment, the producer applied a price reduction of between $10-20/ton for HDPE Film, LDPE Film, and LLDPE Film C4 grades. In the second half of May, SSESSMENTS.COM’s pricing database noted that no fresh offers were available in the import market as a large number of Pakistani market players left their desks for Eid Al-Fitr holiday, an annual Muslims celebration that marks the end of the month of Ramadan (fasting month).
Despite a steady rise in the number of confirmed cases, Pakistan has begun lifting lockdown restrictions in a phase-wise manner by allowing various businesses to resume activities from May 9 to stem a deepening economic meltdown, asserting that the country is unable to afford an indefinite closure. Since the country was gradually lifting the stringent lockdown measures, market sentiment and domestic demand have turned positive over the week. Downstream factories started securing some volumes to cover up production and resuming operations under strict physical distancing guidelines and safety precautions. However, most manufacturers still scramble to increase sales to the export market even though most countries have loosened their lockdown restrictions, citing that Coronavirus spells disaster for the global economy. As such, Pakistani converters were only producing to fulfil domestic demand. In the second half of May, activity in the Pakistan PE market was muted, with limited spot trades was taking place as the majority of Pakistani market players were away from their desks for Eid Al-Fitr celebration. SSESSMENTS.COM’s supply and demand database noted that the availability of spot PE cargoes in the market remained sufficient for most of the month.
In terms of outlook, the majority of market sources in Pakistan forecasted that the pace of demand recovery will depend on the country’s economic revival. Some sources expressed that demand will unlikely to fall further as the government launched new bailout measures for the local industries to support the economic recovery.
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