Demand For PE Cargoes In Australia Burdened By The Resurgence Of Coronavirus Outbreak
- Deep-sea HDPE Film cargoes at $920/ton deemed unworkable
- Flat demand recorded this week as coronavirus wreaks a havoc
- Australia PE market outlook depends on ethylene and naphtha price movement
Demand in Australia PE market has not yet recovered, which affects buyers' acceptance for the latest import offers. A distributor revealed to SSESSMENTS.COM that import PE offers to Australia remain firm this week. The distributor received offers for US origin HDPE Film cargoes at $920/ton on CIF Australia Main Port basis. These offers are deemed too high and unworkable as cargoes will be shipped directly from the US, which takes about 7 weeks to arrive in Australia. The distributor then decided to skip purchases. For other PE grades, the distributor reported on concluding deals for HDPE Blow Moulding and HDPE Film cargoes from a Thai PE producer but was not willing to disclose the levels.
In terms of demand, SSESSMENTS.COM noted there are no major changes by far in Australia PE market. According to a trader, demand cannot be considered as strong at the moment as Australia is battling the second wave of coronavirus outbreak. Per a report by Reuters on July 9, the government imposed lockdown on Melbourne for six weeks from midnight on Wednesday, July 8. Melbourne is the capital of Victoria state, which was responsible for 134 new cases as confirmed on Wednesday morning. While the number down from record number on Tuesday, July 7 by 191 new cases but still coronavirus cases in Victoria are much higher than the other areas of the country. This development, coupled with Victoria closing their border to New South Wales, deal a blow to Australia's hopes for quick economic recovery after imposing social distancing restrictions in March 2020 in which induced economic recession for the first time after almost three decades.
In terms of outlook, market players in Australia opined that import PE offers will continue to depend on the movement of ethylene and naphtha prices. SSESSMENTS.COM being told that crude oil price and OPEC countries strategy to control the crude output is one thing to look out for. Some trader put their hope onto OPEC countries for keeping output at a reduced rate, which then put stop on free-falling in ethylene and naphtha price.
