A Thai trader contacted by SSESSMENTS.COM informed that the company has set a different pricing strategy from local PE and PP producers in an attempt to lure buyers. This week, the trader’s local offers for both PE and PP cargoes remained stable from last week’s levels, citing that upward adjustments made by local producers were not significant. Compared to local producers’ price list, the trade’s offers for local HDPE Film and LLDPE Film C4, as well as localized Malaysian LDPE Film cargoes are THB2,500/ton ($81/ton) lower. Likewise, the trader’s offers for local PP Homo Injection and PP Homo Raffia are THB4,500/ton ($145/ton) lower than the producers’ offers.
At the moment, sluggish demand for both resins and finished products is the main concern in the domestic market. As demand for end-products remains slow as most converters are having cash flow issues. The trader thinks that demand will not improve anytime soon, it may take at least half a year until the demand is able to recuperate. As such, even when the supply for PE and PP materials is limited; there would be no impact on buying sentiment in the domestic market. Speaking of supply, the trader informed SSESSMENTS.COM that one of the Thai PP producers has yet to offer to the export market due to limited allocation on their end. Citing that there are some issues in the producer’s cracker, which are affecting the propylene supply; thus, the producer has to cut the production rate at their PP lines. However, no further detail about the production cuts.
In the days to come, the trader opined to SSESSMENTS.COM that the current uptrend in both PE and PP prices would only be short-lived. By the second half of July, the trader believes that most producers will adjust down their offers in order to move cargoes smoothly.
