Last week, spot PP prices were pulled lower in Southeast Asia in line with declining spot propylene prices on an FOB Korea basis amid widespread concerns over the health of the global economy, as per ChemOrbis. The previous weeks saw spot PP prices hold ground as sellers were reluctant to lower prices owing to tight supply, although market activity was extremely limited as most buyers retreated to the sidelines in anticipation of further price declines in the days ahead.
According to data from ChemOrbis Price Index, spot homo-PP prices on a CIF SEA basis dropped US$45-110/ton over the past week as offers at the upper end of the range were withdrawn owing to a lack of buying interest while traders lowered their prices in hopes of enticing buyers back to the market. Trading activity was limited last week as most players await new September prices from overseas producers before taking a position in the market. Distributors in Vietnam reported reduced offers for locally-held cargoes by around US$25/ton over the past week while an Indonesian producer opened the current week by announcing price decreases of $20/ton on their homo-PP prices to the local market. The decline in Southeast Asia’s homo-PP market has closely tracked movements in spot propylene prices on an FOB Korea basis. PP sellers were aided in their firm stance on prices by the fact that spot propylene prices remained firm during the first two weeks of August even as crude oil and naphtha prices plunged in response to worries that major Western economies might slip back into recession. Spot propylene prices declined dramatically last week before recovering some of their lost ground and are currently trading around US$65/ton lower than their intra-August highs.