Asia is beginning to see the bullish sentiment weaken. However, local markets in Thailand continue to retain their firm stance as PP and PE prices move higher, as per ChemOrbis. Many converters from different sectors are showing willingness to buy more despite the ongoing rise in prices, on firm end product demand. Bogged by limited supply, distributors are offering in reduced amounts. The supply constraints appear to be valid particularly for LLDPE, say sellers.
Local PP prices have seen a slight increase when compared to late January whereas HDPE and LDPE prices are THB1000-2000/ton (US$32-65/ton) higher, according to buyers and resellers. When it comes to LLDPE, larger increases have been observed.
A plastic bag manufacturer in Bangkok told ChemOrbis, “The LLDPE offers I have received this week are standing THB4500/ton (US$145/ton) above the price I paid in late January.” A distributor also said that he could not receive any offer for LDPE and LLDPE as their supplier has run out of stocks. “Now that supply is limited and buying interest from converters has improved, the producer is likely to raise offers further,” he opines. A second distributor also confirmed the limited supply and better demand in the local market. He said, “The domestic producer has very little LLDPE to sell.” Upon his search for some LLDPE cargoes in the import market, he received a Middle Eastern LLDPE offer for material that will be re-exported from China. A third distributor who lifted his locally held PP, HDPE and LLDPE offers said, “I think the firm trend will last for a few weeks more.” Contrary to the buoyant comments of most distributors, one distributor said, “The market is quiet this week. We have few stocks and we are not confident about the market outlook for the near term.” However, he admitted that the overall market activity has improved in Thailand.
Two PVC producers have also achieved higher prices this month while they are considering another round of increases. A source at one of the producers said, “Local demand is stable and we are mulling over the size of the increase for next month. As we have limited stocks, we are not under sales pressure.” A source at a second producer also commented, “Demand in Southeast Asia is healthy and we have more profitable margins selling within the region rather than exporting to other regions. We may implement an additional hike to the local market by next month and it can be larger than THB1000/ton.”
On the buyers’ side, there are bullish comments too. A couple of plastic bag manufacturers said, “Even though PE prices continue to rise, our end product demand remains firm and we can afford buying more cargoes at the higher levels.” A buyer in Samutprakarn manufacturing electric appliances reported receiving HIPS and PP block copolymer offers on local terms. “Demand for our end products is still good regardless of rising prices for raw materials,” he remarked. Another buyer manufacturing housewares in Bangkok reported buying Thai homo PP injection on local terms this week. He commented, “The current market level is too high but we have had to accept it as we ran out of stocks.”