Thai traders and distributors shared with SSESSMENTS.COM the reasons why the current local PE and PP offers from several producers in Thailand deemed unworkable. This week, a local producer decided to roll over PE offers from last week. The producer keeps a firm PE offers as most of their agents still have old stock at higher prices. Likewise, local PP offers from another producer remain unchanged on a weekly comparison. However, these local offers for both PE and PP cargoes from the producers deemed unworkable as most buyers faced a cash flow issue and difficulties to sell the finished products. Moreover, market talks have it that some traders sold PE cargoes between THB1,000-1,500/ton ($31-46/ton) lower than the producer’s offers. While some buyers express buy idea for PP Homo Raffia at THB500-1,000/ton ($15-31/ton) lower than the initial offers at THB27,500-28,000/ton ($847-863/ton) on 30 days credit term, FD Thailand basis and excluding 7% VAT.
In contrast, SSESSMENTS.COM noted that a local trader adjusted up PP Homo Film and PP Homo Injection by THB500/ton ($15/ton) as a local producer adjusted up PP offers by the same amount due to the good sales on the previous week coupled with no inventory pressure at the producer’s end. In the import market, offers for Singaporean LDPE Film stood at $870/ton on LC at sight, CIF Thailand Main Port basis.
Overall polymer market in Thailand is quiet as most buyers have purchased some cargoes in the previous week. Sales at a trader’s end dropped by 20-40% amid the Coronavirus pandemic. Likewise, demand for the finished products such as plastics packaging decreased by 20% from normal sales. The government has decided to extend the state of emergency for a month to flatten the COVID-19 infection curve. However, some businesses like department stores, barbershops, and restaurants will be allowed to reopen. Most converters hope that the decision to reopen some businesses will help finished product demand to recover, as stated to SSESSMENTS.COM.
Thai market players opined to SSESSMENTS.COM that local PE and PP prices still have room to decrease further due to the drop in crude oil prices coupled with the lower import prices. While Thailand’s market outlook remains pessimistic as the economy would not recover soon even if the COVID-19 outbreak is over.
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