Softening trend prevails in SEA PP market as virus fears dampen sentiment
Homo-PP and PP block copolymer prices on CIF SEA basis declined around $10-20/ton from last week with sellers pointing to subdued demand from the downstream markets. An increased number of import and re-export offers from China also weighed on the market, noted a few players.
PP consumption declines due to fears of virus spread
Outside of China, Southeast Asia has been among the most affected by the coronavirus outbreak. With more infections in Thailand, Singapore, Malaysia and the Philippines, the threat of impacting business grows due to quarantine and isolation measures.
According to regional players, most PP buyers have preferred to stay sidelined so far, as demand towards their end products has been tempered by concerns over the spread of the coronavirus.
“Producers had initially raised PP offers for February, but there is great resistance from buyers who see the coronavirus as a big threat,” a regional trader said. He added, “Middle Eastern producers argue that supply is tight and Southeast Asian producers have voiced similar sentiments. However, several suppliers have already step back on their hike requests.”
Import and re-export PP offers from China weigh on SEA
Players report that more re-export homo-PP cargoes from China have been offered to the regional markets, particularly to Vietnam, since last week. The greater supply from China has also increased buyers’ resistance to price hikes and pushed sellers to lower their offers.
A Vietnamese converter opined, “There are more import and re-export offers from China currently, and therefore we worry that prices may soften further. If the outbreak gets worse and China blocks more cities, Vietnam will be affected as several factories need to import raw materials from China and also employ Chinese workers.”
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