Market sources informed SSESSMENTS.COM that most downstream factories in Malaysia are still running at reduced rates amid current demand conditions. Further explained, even if the factories received permission to run at full capacity, most of them prefer to run at the reduced rates around 50% from the normal rates as sales at their end remain slow. A converter stated that orders from the export market such as Japan, New Zealand, and Australia dropped more than 30% due to the COVID-19. The converter will be considering to run production at maximum capacity if the situation is better in the upcoming week. More added, export-import activities are allowed starting from April 29, however, the operational is not normal yet due to the previous congestion.
In terms of prices, this week, a local producer in Malaysia has announced May delivery offers for PE and PP cargoes with a reduction between MYR200-300/ton ($46-69/ton). The allocation for May delivery offers from the producer will be normal as no production issue at the producer’s end. As for import cargoes, no fresh offers received from the suppliers. A converter opined to SSESSMENTS.COM that even if the foreign producers sell PE cargoes at $650/ton-level, the profit margin is still good as feedstock prices only around $300/ton-level.
