Sources: Strained Supply Push Prices Higher In Australia PE Market
- Market sentiment has yet to show signs of a rebound
- Demand for certain grades picked up
- Market players foresee that uptrend will be short-lived
Strained supply is pushing prices higher in the Australia PE market, sources reported to SSESSMENTS.COM. Over the week, most foreign suppliers set a round of price increase to Australia, taking account of a supply shortage in the market. For US origin, a distributor quoted higher offers for US HDPE Film cargoes to Australia last week. As informed, current HDPE Film of US origin is available at $920/ton on LC at sight, CIF Australia Main Port basis, a rollover from last week’s level. However, these offers are deemed too high and unworkable considering long lead time, since the cargoes will be shipped directly from the US. As for Middle East origin, a producer said that the company received overwhelming requests for HDPE Pipe grades from buyers in Australia, citing limited spot availability in the market. This week, the producer has reportedly sold all HDPE Pipe allocation to Australia market but was not willing to disclose the levels. Meanwhile, some traders have yet to receive fresh PE offers this week.
Australia PE market has largely been weighed by persistent bearish sentiment amid falling demand from the end-user segment. Over the week, market sentiment is leaning towards a bearish undertone as sales for finished products remain sluggish. Sources pointed out that the most construction industry in Australia has been facing a severe labour shortage for the past few months, which has led to delay in many projects. According to the latest reports, Australian construction activity has continued to slow in June, although enquiries have picked up. The Australian Industry Group and Housing Industry Association's Performance of Construction Index (PCI) rose by 10.6 points to 35.5 in June. However, readings below 50 indicate a contraction in activities. SSESSMENTS.COM was informed that the worst-hit sectors are apartment building and commercial construction.
For the outlook, the majority of market participants in Australia voiced out to SSESSMENTS.COM that the uptrend in PE prices will be short-lived as there are no strong demand fundamentals to support the price hikes.
