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Will limited supplies from Thailand gain prominence in SEA?

  • 24/07/2017 (04:14)
PE players in Asia report that supplies from Thailand have been limited in the past weeks due to the recent shutdowns at the plants of PTT Global Chemical and SCG Plastics. Although several Thai players confirmed that the tightness had no major impact on local offer levels and the region’s local markets mostly remained bearish, import PE prices to Southeast Asia slightly recovered from their multi-month lows last week.

Many players attributed the recent recovery in the region’s PE market to China, where prices cautiously turned upwards on the back of the pressure from rising local prices and strong futures. Apart from the modest gain in China, limited supplies from Thailand stood as another supportive factor, with some players commenting, “The tightness in Thailand may gain prominence and put upward pressure on local prices if the upturn in imports is maintained.”

A trader operating in Bangkok noted, “We haven’t received any offers from SCG for the last two weeks given the producer’s unexpected shutdown in late June. However, reducing supplies have not had any major impact on local prices so far. Despite sellers’ hike attempts, demand remains weak amidst the ongoing rainy season, with buyers showing resistance to higher levels.”

A global trader said, “PTT currently offers for late August shipments only. Their HDPE allocation for July has been seriously affected by their shutdown.” A Vietnamese trader added, “We have not received any HDPE injection offers from Thai PTT so far. We heard that the producer’s allocation is quite limited.”

Meanwhile, some players claimed that supply issues at both producers have started to ease recently. An agent of SGC Plastics noted, “The producer’s HDPE supply has turned back to normal levels, yet they are only feeding their regular customers for the moment.”

An Indonesian converter also opined, “We heard that both PTT and SCG have started to give offers to their regular customers recently. However, we feel that the producers will mostly adopt a firm stance on their pricing strategy for the third quarter, citing their supply restrictions. The import PE market was on a soft path for the past five months as demand was persistently weak during the second quarter. Therefore, sellers may try to maintain a firm outlook from now on.”

“The shutdowns of these two producers in Thailand may remain under the shadow of the upcoming PE capacities in Asia and the US. However, the recent upturn might be preserved if China continues to gain ground in the days ahead,” a few regional traders commented.
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