Pakistan PP Market Moving Along Amid Worsening Coronavirus Pandemic
- Offers more than $1,000/ton perceived too high by buyers
- Demand reported still ongoing amid worsening coronavirus situation
- Demand would be softer in the days to come
Pakistan PP market is moving along amid worsening coronavirus pandemic. A distributor revealed to SSESSMENTS.COM that offers for PP cargoes from the United Arab Emirates increased between $40-50/ton as compared to last month. However, as the allocation is rather limited, they already sold out since the first week of June. For PP homopolymers, deals were concluded at $850/ton, and PP Block Copolymer between $890-900/ton, while PP Random Copolymer Injection at $980/ton. One of the traders reported that earlier this week, they only received import PP Block Copolymer offers from South Korea at $1,030/ton. The trader also reported that buyers did not have an interest in this offer, which is considered too high. All offers on LC at sight, CFR Karachi Port.
The distributor told SSESSMENTS.COM that demand is tenable this week with their company managed to sold-out the cargoes and now waiting for July shipment offers from foreign suppliers. Not only because of the lesser quantity but distributor saw Pakistan market already showed some improvements after the Eid holiday. Distributor quoted that the production rate of their customers currently still at $60-70%, but the demand for raw materials can be maintained. However, SSESSMENTS.COM noted that the whole plastic and chemical industry has a concern not yet having a clear picture going forward as Pakistan introduces “smart lockdown” policy. Per report by Anadolu on Monday (June 15), Pakistan identified 20 areas including Islamabad, Karachi, Lahore, Peshawar, and Quetta, as "hotspots" or having a possible increase in ratio/speed of coronavirus infection. In line with the "smart lockdown" policy, these hotspots will be sealed off as different sectors and the businesses will be allowed to open. This smart lockdown is a negative development after on May 9, Pakistan lifted its first mass-scale lockdown. Before reopening, Pakistan had recorded about 25,000 infections per New York Times report. Official numbers per June 17 show 154,760 confirmed cases. Pakistan misery was also exacerbated by economic conditions that collapsed due to the pandemic. As SSESSMENTS.COM noted, Pakistan's economy could contract by 0,2% in the next fiscal year according to World Bank projection. According to the Pakistan Institute of Development Economics, up to 25% of the country's 74 million jobs could be lost during the pandemic. Click here for more information about coronavirus impact on Pakistan’s polymer demand.
As market players monitoring the situation, they shared to SSESSMENTS.COM that the state of Punjab has begun their own lockdown for two weeks since Tuesday, June 16. A trader pointed out it will cause labor issues as there is no way the workers will be able to reach their workplaces. Different view voiced out by a local distributor which opined that it will cause small effects to the industrial sectors because the lockdown is mostly in residential areas. Eventually, market players say that the PP resins demand could down by 10% because of the new restriction policy applied by the government.
