- Import PP offers to Pakistan were scarce at the beginning of the quarter
- PP demand in Pakistan during Q2 of 2020 was sluggish
- Demand is predicted to worsen as the number of Covid-19 cases continue to increase
In Q2 of 2020, import PP offers to Pakistan fluctuated with changes mostly on a monthly comparison. At the beginning of the quarter, April shipment offers from the United Arab Emirates dropped by more than $100/ton. In the second week of April, there were very limited transactions as the lockdown imposed by the Pakistani government to curb the COVID-19 spread had affected the market. SSESSMENTS.COM was told that the significant drops in crude oil prices in the third week of the month worsened the situation. The number of transactions dropped to nil. In the last week of April, May shipment offers from the leading Saudi polyolefins producer surfaced with increases between $30-40/ton for PP Homo Injection and by $30/ton for PP Homo Raffia compared to deals for April shipment. In the first week of May, May shipment PP offers from a Saudi producer decreased by $130/ton compared to March shipment offers. Similarly, PP Homo Raffia offers for May shipment from an Emirati producer were adjusted down between $10-20/ton on a monthly comparison.
In the second half of May, import PP offers and transactions in the Pakistan market were once again scarce due to Eid Al-Fitr holiday. In the first week of June, June-July shipment offers from Saudi producers were available with an increase of $10/ton. In the week commencing June 15, SSESSMENTS.COM was informed that June shipment offers for import PP cargoes of United Arab Emirates origin captured between $40-50/ton higher from a month earlier. The allocation was limited and had been sold out since the first week of June. In the fourth week of June, offers for PP Homopolymers of Southern Africa and Middle East origin recorded at $920-930/ton and $960/ton on LC at sight, CFR Karachi Port respectively.
Demand for PP in Pakistan during the quarter was sluggish. On April 1, the Pakistani government announced a two-week extension in the lockdown and restrictions on public movement due to the rising numbers of coronavirus cases in the country. Western borders with Iran and Afghanistan and eastern border with India was closed. On April 13, the Pakistani government decided to extend the ongoing nationwide lockdown and border closure until April 30. The lockdown was then lifted on May 9. During the lockdown period, demand for PP was weak as sales for the end products waned. Market players reported to SSESSMENTS.COM that PP demand slightly improved when the lockdown was lifted as converters were doing stock replenishment. However, PP demand sagged again due to the Eid Al-Fitr holiday. In June, slow demand for PP was associated with the high offer levels available in the market. Besides, buyers were being cautious in making procurement considering the situation in the country. New cases of COVID-19 infections continued to increase since the lockdown was lifted. However, the Pakistani government preferred to impose a smart lockdown strategy to control the spread of the Coronavirus, dismissing the World Health Organization (WHO)’s recommendation to reimpose complete lockdown because the country’s economy was unable to afford the complete lockdown. No significant supply issues reported during the quarter.
Looking ahead, market players told SSESSMENTS.COM that the outlook for PP prices in the near term in Pakistan is unclear yet. Meanwhile, demand is predicted to decline further since the number of confirmed cases of the COVID-19 is still increasing.
