Demand and market outlook affected by Ramadan, summer holidays in August

The month of August is a traditionally low season due to the summer holidays particularly in South Europe, where Italian buyers have already started to shut their plants, as per Chemorbis. Europe's summer holidays have coincided with Ramadan this year. Ramadan, to be celebrated by the Muslim world, will start August 11 and last until September 9, followed by a three day holiday. Many players across the globe have started to comment on the effect of the upcoming Ramadan month on demand. In Italy, the activity in spot markets has lost pace this week as an increasing number of buyers bring their plants offline. Though some large sized buyers, with robust end product orders, are planning to remain operational, majority of the players will keep away from the market starting from next week. These shutdowns are expected to last at least for two weeks while the full resumption of market activity is not likely to occur until the beginning of September. When looking at other markets, some players are concerned about the possible impact of Ramadan on demand in Southeast Asia. According to players in Malaysia and Indonesia, demand may not be particularly good this month. An Indonesian PVC producer's higher offers are not meeting with acceptance in the local market due to players’ expectations of slower demand, despite producers finding support for raised prices from higher import offers. Governments in these countries impose restrictions on overland cargo transportation towards the end of the Ramadan month, hence few PP and PE converters are also talking of shutting their plants for a few weeks this month. In Egypt, demand is mostly expected to slow down this month. Buyers are restricting their purchases to their immediate needs as they do not want to stock up ahead of their low season. In the PVC market, a domestic producer recently back from a maintenance shutdown announced a rollover on prices despite upward pressure from higher imports. In the PE market, the domestic HDPE producer also returned from a maintenance shutdown with lower prices, which was expected in the midst of lower import prices as well as expectedly slow demand during Ramadan. In Turkey, buyers are also expressing similar comments. Early in the week, particularly several PP buyers stated that it is a traditionally slow month and the recent firming in prices would not be sustainable in the medium term.
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