South East Asia’s PP market balanced between higher costs, lackluster demand

In Southeast Asia, spot PP prices continued to track a mostly steady trend over the past week with the market being described as balanced between higher upstream costs and sluggish demand, as per Chemorbis. Done deals for locally-held PP cargoes moved lower over the past week as a number of distributors expressed willingness to agree to discounts in order to speed up sales. Distributors in Indonesia report to have offered homo-PP to the local market last week, at prices well below the producer price level, as increased availability of locally-held Thai and Malaysia cargoes has helped to ease the ongoing supply tightness in the Indonesian market. Although done deals for locally-held import cargoes have been reported up to US$80/ton below the producer price level, producers lack willingness to reduce their offers to the local market given persistently strong upstream costs. In Vietnam, distributors are reported to be offering domestic cargoes for export to destinations as far as Europe and the Middle East in the face of persistently sluggish demand from the local market. In Malaysia, a domestic producer expressed May sell ideas with rollovers from their most recent April offer levels, amid limited trading activity in the local market for the past few weeks. Distributors in Malaysia have generally left their offers unchanged in line with producers’ firm stance on prices, although some distributors have hinted that they are prepared to consider some discounts for buyers willing to place firm bids. In addition to an increasing number of offers from local sources within the region, traders report that re-export offers from China are continuing to make their way to markets in Southeast Asia. Traders commented that most of the prices reported towards the lower end of last week’s overall import range consisted of re-export offers from China, with re-export offers for Indian, Middle Eastern and Chinese origins being offered to Southeast Asia on an ex-China basis last week. A major Middle Eastern producer announced May offers for homo-PP to the Southeast Asian market last week with decreases of US$20/ton from April after an initial May offer from the Middle East had been announced with a rollover from April two weeks ago. One Southeast Asian producer expressed May sell ideas with rollovers from April owing to lackluster demand from the region while another Southeast Asian producer announced new homo-PP prices with an increase of US$50/ton from the past month, pointing to higher upstream costs as justification for their price increases. The producer acknowledged that their new offers have not attracted much interest from buyers so far.