As Philippines citizens remain confined at home as general community quarantine is still in force in Metro Manila, a PP converter faces problems on the production sector. The converter informed SSESSMENTS.COM that production rate is kept at 50% this week; no changes from last week as the shortage of labour persists following the limited transportation in the country. The converter does not see any possibility of improvement in transportation in the near term as COVID-19 infections spike continued in the country. The converter also reported that their stock is enough to cover the production, causing the company to not observe price movements for PP cargoes in the market.
The converter shared to SSESSMENTS.COM that there is still a steady demand for woven sacks, although it is still below the normal rate before coronavirus pandemic. For packaging product, demand only concentrates on essential products such as food containers. However, the converter added further that June business is a lot better as in May the factories across the Philippines were running at a very low rate. Upstream, the converter heard that a local PP producer concentrated delivering orders to the domestic market recently; while another local PP producer is still facing difficulties due to the lack of propylene supply.
In terms of outlook, the converter opined that the PP price will remain firm in the short term as the Southeast Asian producers have limited supply. Also, market players believe that most producers deliberately reduced availability of cargoes in the market in order to support the price as SSESSMENTS.COM quoted from the converter.
