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Supply concerns ahead for Thailand’s PP, PE markets

by Abdul Hadhi -
  • 29/09/2020 (09:21)
Domestic homo-PP raffia prices in Thailand climbed over the past week on supply allocation concerns amid an unplanned shutdown while upcoming turnarounds have provided some support to the country’s PE market.

The weekly average of PPH raffia prices rose 5% over the week from $1034/ton to $1092/ton FD Thailand, cash basis, according to ChemOrbis Price Index data.

The weekly average of local prices of LDPE film, meanwhile, increased from $1122/ton to $1132/ton while LLDPE and HDPE film edged marginally lower to $1009/ton and 1029/ton, respectively, on similar terms.

Sentiment acknowledges supply allocation issues

A local trader explained, “Market sentiment seemed to acknowledge some concerns over local supply allocation on unplanned and planned shutdowns.”

PP climbed as producer IRPC experienced an unplanned shutdown of one of its PP lines at Map Ta Phut. Due to shutdown, IRPC was only able to give several buyers limited volume allocation of PP film, according to sources close to the company. IRPC’s PP facilities at Map Ta Phut have a production capacity of 775,000 tons/year.

Volumes for PE also being limited for certain grades

Among the other shutdowns are PTT’s scheduled three-week turnaround of its 300,000 tons/year LDPE plant at Map Ta Phut from September 20 and Siam Cement Group’s (SCG) planned shutdown of its Map Ta Phut olefins complex - with a production capacity of 900,000 tons/year of ethylene and 800,000 tons/year of propylene - from November 1 to December 15 along with its LLDPE joint venture with Dow.

According to traders, SCG has informed its regular buyers that they have been stocking up on inventory ahead of the shutdown and will support them first amid the limited volumes.

Diversion of cargoes amid Chinese holidays

Supply concerns, however, could be mitigated in the short term due to import availability amid the lengthy Chinese holidays.

The business lull in Chinese during the week-long national holidays starting from October 1 is expected to see import cargoes diverted to other regions such as Southeast Asia, according to market player.
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