As import PE offers continue to soar amid the sluggish finished products demand due to Coronavirus lockdown, a Philippines converter is questioning the sustainability of the current trend. As contacted by SSESSMENTS.COM on May 27, a Philippines converter revealed on receiving import offers for mLLDPE C6 from a Singaporean producer at $30/ton higher than the offers received two weeks ago. Previously on May 14, the producer had also increased their offers by $20-30/ton on a week-on-week comparison. As such, the producer has made an upward adjustment of $50-60/ton in total during May. Likewise, the converter also received import offers for LLDPE Film C4 from the leading Saudi polyolefins producer with shipment from Malaysia or Singapore bonded warehouse. The latest offers from the producer surged by $40/ton on a monthly comparison.
Responding to the offers, the converter commented to SSESSMENTS.COM that prices for both import PE cargoes are too high and unworkable. For Saudi LLDPE Film C4 cargoes, the offer is considered too high after adding the 3% customs duty to the Philippines. While for Singaporean mLLDPE C6, the converter did not take the cargoes since current offers at $1,040/ton is crazily high. Besides, the converter had recently secured some volume of mLLDPE C6 from Thailand at $880/ton. All offers are on LC at sight, CIF Manila Port.
On the production sector, the converter keeps production rates at its factories at below 50% of the normal capacity. The overall demand for finished products in the Philippines has yet to recover since the country is still under lockdown. As such, the converter is questioning whether the current firm prices from the foreign producers would sustain taking into account the sluggish end-products demand. However, if crude oil prices remain firm, those producers might insist on the current high offers, the converter told SSESSMENTS.COM.
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