Sources: Current Demand Condition In Pakistan PP Market Below Expectation
- Import prices gained some strength, backed by supply condition
- Supply for certain PP grades remains tight
- Demand is expected to be slow ahead of Eid Al-Adha holiday
Market sources told SSESSMENTS.COM that the current demand condition in Pakistan PP market is still below expectation. Import PP prices were continuing their upward trend from a week earlier, holding firm on the back of the relatively tight supply in the market. For Middle East origin, import offers for PP Homo Injection and PP Homo Raffia surfaced in the market at $30/ton higher than offer levels available last week. As for Southeast Asia origin, a global trading house mentioned that the latest import offers for PP Homo Raffia from a Vietnamese producer are available at $1,010/ton on LC at sight, CFR Karachi port, with the total allocation around 500 tons. The offers are for prompt delivery from Vietnam main ports, and only valid until July 15, 2020. However, offers and quantity are subject to final reconfirmation by the producer.
Demand-wise, overall downstream consumption is still considered healthy as supported by supply hiccups. However, Pakistani market players view the current situation as below the expectations as the majority of buyers are still reluctant to accept the current offer levels. In fact, the market has largely been weighed by bearish sentiment amid sluggish end-product demand. Converters, in turn, prefer to adopt a cautious stance and held back purchases. On the supply side, SSESSMENTS.COM was informed that the availability of spot PP cargoes remain scarce, particularly for PP Homo Injection as some suppliers are running low on allocations. Further added, most Middle Eastern producers diverted most allocation to Europe; hence, allocation to Asia market is low.
Looking ahead, market participants in Pakistan voiced out to SSESSMENTS.COM that that a further increase in import PP prices might be on the horizon considering the current supply conditions. Demand-wise, some sources opined that the market will be slowed down ahead of the Eid Al-Adha holiday, which falls on 30 July and lasts until 31 July, as trading and manufacturing activities are expected to dwindle.
