Asian demand outlook sluggish in Asian polymer markets

As players in Asian polymer markets wind down their business for 2011, attention is shifting towards the market outlook for early 2012, as per Chemorbis. With demand ending the year on a disappointing note and the upcoming Chinese New Year holidays expected to result in a short trading month in January, sellers generally acknowledge that demand is not likely to see much improvement in January, though few remain hopeful that demand will start to pick up in February after the Chinese New Year holidays. A distributor in Malaysia reported that domestic producers announced steep decreases for January on their PP and PE prices to the local market owing to lackluster demand. “We believe that most buyers will only be active for about two weeks next month due to the Chinese New Year holidays and we expect most buyers to purchase in smaller than normal amounts next month,” reported the distributor. A Malaysian converter active in the packaging sector commented, “We are not planning to make any purchases until after the Chinese New Year holidays as we expect to see lower prices at the start of February and are holding enough material in stock to cover our needs for the next month.” In China, polymer demand has been slow this week owing to the year end. The slowdown in China’s economy has been hampering demand from the country for the past several weeks, with PVC converters active in the construction sector voicing some of the loudest complaints about unsatisfactory demand for their end products. A distributor offering locally-held PP cargoes reported market activity is limited at end of year and that they are tracking market developments for now to get a better idea of the upcoming trend for January. “Buyers are offering strong resistance to prices at the upper end of the overall offer ranges and demand remains disappointingly slow.” Locally-held LLDPE prices in China were stable to slightly firmer in the last week of the year on the back of firmer LLDPE futures prices and speculation that the LLDPE market might be near the bottom, although LDPE and HDPE prices were stable to softer on the week. A distributor who lifted their LLDPE prices commented, “LLDPE prices have moved higher as LLDPE demand is relatively better than demand for other PE products, but LLDPE demand is still disappointing and we are not planning to make any fresh purchases given the gloomy global economic outlook.” Stronger upstream feedstock costs, especially for butadiene, have led players to predict firmer PS and ABS prices at the start of the new year although the demand outlook for these products is also said to be unsatisfactory given the upcoming Chinese New Year holidays. “We left our prices unchanged this week as we did not want to scare away buyers in the last week of the year. We feel that demand will not prove strong enough to support any major up-tick in prices over the near term,” reported a source at a Chinese producer. A global producer who lifted their prices this week admitted that, “our sales are not satisfactory and we have only been able to conclude a limited number of deals this week.” Converters in Southeast Asia also reported seeing firmer import PS prices this week while adding that they did not make any fresh purchases at higher offer levels. “We are planning to wait until after the holidays before making any fresh purchases as we want to track the market movements for a while longer,” commented a converter in Malaysia.