Southeast Asian Buyers’ Stance Will Put A Cap On PP Price Adjustment
- Local PP offers in Thailand, Malaysia, and Philippines exhibited the same trend
- Import PP offers reported scarce
- Buyers’ stance would put a cap on upward price adjustment
Southeast Asian market players stated to SSESSMENTS.COM that buyers’ stance would put a cap on PP price adjustment. Within the week commencing July 6, local PP prices in the Southeast Asia market reported unchanged from last week’s levels, except in Indonesia and Vietnam. Citing the high production cost and relatively tight supply in the region, producers are unwilling to make a downward price correction despite buyers showing stiff resistance. In Thailand, local PP Homopolymer grades in the market are available between THB35,000-37,000/ton ($1,121-1,185/ton) depending on the payment term. However, a local trader was willing to conclude deals at THB34,000/ton ($1,089/ton) on cash, FD basis and excluding 7% VAT as the trader is facing difficulties in selling materials. In the Philippines, offers for local PP Homo Raffia from the producer remain stable from last week at PHP64,000/ton ($1,291/ton) on cash, FD basis and including 12% VAT. In Malaysia, the offers for PP Homo Film and PP Homo Raffia are rolled over from last week’s levels. Offers for PP Homo Film and PP Homo Raffia are at MYR4,550/ton ($1,064/ton) and between MYR4,400-4,450/ton ($1,029-1,041/ton), respectively, all on 30 days credit term, FD basis and excluding 6% SST. In the import market, no fresh offers were recorded until the time of publication. Detailed information for Indonesia and Vietnam market is available in WeeklySSESSMENTS of the respective countries.
Demand for PP resins within the Southeast Asia market reported subdued. The slow sales for the end-products amid the rainy season pushed converters in Thailand and the Philippines to reduce the operating rate to 50-60% from the normal capacity. Converters in the mentioned countries have no intention to procure some materials as the offers deemed unworkable amid slow demand. On the supply front, no significant issue was reported to SSESSMENTS.COM.
In the days to come, Southeast Asian market players opined that PP prices would remain stable in the near term. Although the upstream market is on the firm note, buyers’ resistance towards the high prices would put a cap on upward adjustments. Demand-wise, this time is the traditional low season for PP due to the rainy season that hit some parts of the region. However, the pandemic is worsening the situation and the sign of improvement remains bleak, SSESSMENTS.COM was told.
