Southeast Asian Market Players Remain Optimistic On PS Demand Recovery
- Demand for certain products remains healthy
- Some manufacturers started to increase production rates
- No significant supply issues reported
As stated to SSESSMENTS.COM, Southeast Asian market players remain optimistic on PS demand recovery in the near term. This week, Southeast Asia’s spot PS prices were largely unchanged despite a firmer energy market. In Indonesia, most traders and local producers opted to roll over offers for GPPS Injection and HIPS Injection from last week’s levels. As the market has just returned from Eid Al-Fitr holidays, one of the local producers has yet to sell out all allocation for this week. To the distributor, the producer is offering GPPS Injection and HIPS Injection cargoes in USD-denomination at $980/ton and between $1,150-1,155/ton on cash, FD Indonesia basis and excluding 10% VAT, respectively, with done deals achieved at the initial offer levels. In contrast, a supplier slashed their offers for localized Thai PS cargoes in response to appreciation of Indonesian Rupiah against the greenback. From the import market, a South Korean PS producer maintained their offer level for GPPS Injection and HIPS Injection stable from a month earlier, available in the market at $900/ton and $1,000/ton, respectively on LC at sight, CIF Vietnam Main Port basis. Transactions remain limited this week as most buyers already secured sufficient volumes in the past few weeks. Meanwhile, some traders are saddled with high inventory levels as companies were unable to move the cargoes in the previous week.
Southeast Asian countries have begun easing its restrictions put in place to combat the coronavirus pandemic in a graded manner from early May despite rising coronavirus infection cases in some parts of the region. In Thailand, Indonesia, and Malaysia, some sources pointed out that the recovery in end-products demand has yet to take place, particularly for electrical home appliances as overall consumption has not yet to show signs of a rebound. However, some converters in Vietnam and Indonesia are seeing better demand for food and beverage packaging materials since the onset of the outbreak. Even after the coronavirus crisis subsides, sources foresee that food and beverages packaging materials will continue to be in high demand. As a result, some manufacturers have started to increase the production rate to meet demand for their finished products. SSESSMENTS.COM’s supply and demand database noted that the availability of domestic and import PS cargoes remain sufficient at the moment, no significant issues reported.
For the outlook, the majority of market players in Southeast Asia remain optimistic on PS demand recovery as most countries hinted at more relaxations in the lockdown rules. Meanwhile, some sources voiced out to SSESSMENTS.COM that there would be a room for PS prices to move lower in the near term despite a rally in the energy market, considering a recent escalation in tensions between US and China.
