Pakistani Market Players: Buyers Retreated To Sidelines As Import Prices Headed Higher
- Pakistani buyers resist higher offers on unsupportive demand
- WHO warns Pakistan to return to lockdown
- Near-term outlook remains pessimistic
Pakistani market players revealed to SSESSMENTS.COM that most buyers in Pakistan have retreated to the sidelines this week as import PE prices have relentlessly headed higher, backed by rising feedstocks prices. In the previous week, a Saudi producer has announced June shipment offers to the market. In comparison to a month earlier, the producer initiated a price increase of $30/ton for HDPE Film Blow Moulding, while maintaining a stable offer level for LDPE Film and HDPE Pipe cargoes. Market talks have it that a Singapore-based trader managed to finalize a deal for July shipment for Middle Eastern HDPE Film and LLDPE Film C4 cargoes at $835/ton, respectively, while transactions for HDPE Blow Moulding are heard successfully concluded at $850/ton. Some sources mentioned that a global trading house has no allocation for Middle Eastern LLDPE Film C4 cargoes to the Pakistan market this week. For Qatar origin, the latest HDPE Blow Moulding is still hovering above $800/ton-level, available in the market at $850/ton. All offers are on LC at sight, CFR Karachi Port.
Authorities in Pakistan have gradually begun lifting restrictions on their pandemic-wounded businesses and economic activity in early May, citing economic losses to justify their decision to lift a coronavirus lockdown. Despite the fact that the country reporting another record number of coronavirus cases with the pandemic expected to stretch on to a few weeks ahead. Pakistan's official tally of coronavirus infections has crossed the 100,000-mark after 4,728 new infections were reported on Sunday, June 7. Upstream, crude oil prices have rallied since April on ongoing supply cuts and signs of a recovery in demand, after turning negative for the first time in history with some benchmarks trading at negative levels. As crude oil prices continued its bullish run, a large number of traders and producers maintained their high price quotes to the market. In turn, most buyers have been showing stiff resistance towards the higher prices within a couple of weeks and preferred to source the materials on a hand-to-mouth basis only, reflecting a sharp drop in demand for raw materials. Further added, most big-scale manufacturers already booked some quantities at lower costs in the past few weeks; thus not in a hurry to replenish stock yet, SSESSMENTS.COM was informed.
A weak performing market led to a pessimistic view among Pakistani market players. Demand-wise, the majority of market participants believe that market sentiment is likely to remain bearish in the near term in the wake of the strong buyers’ resistance toward the higher prices. Some sources also voiced out to SSESSMENTS.COM that the authorities might reimpose nationwide lockdown restrictions as World Health Organization (WHO), the United Nations health agency, suggested a two-week strict lockdown to contain the surging outbreak.
