High costs, limited availability keep PP prices firm in SEA

PP prices in Southeast Asia have firmed up over the past week, with most players attributing this rise to strong upstream costs as well as limited availability, as per Chemorbis. Demand has picked up fairly as compared with the past month, although buyers remain hesitant to purchase in large quantities as demand outlook post-Chinese New Year holidays remains dim. However, several converters report plans to stock some cargoes over the short term, adding that most find prices in their respective local markets to be more attractive than the prevailing import price levels. Homo-PP offers in the region’s import market moved up by US$50/ton on the low end and the high end of the overall range last week as producers and traders continued to revise offers higher in the face of stronger upstream costs and tight supplies. A major Southeast Asian producer began this week by lifting homo-PP prices by US$60/ton when compared with their latest offer levels while also increasing their PP copolymer prices by US$70-80/ton. A buyer in Vietnam reported to have received an offer for Indian raffia late last week with a price increase of US$60/ton when compared with recent offers received for this origin. Players had been expecting to see higher offer levels for Indian origins based on news that Reliance is planning to conduct a maintenance shutdown at its 1.1 mln tpa PP plant in Jamnagar in February. Although higher import offers have been meeting with resistance from buyers, import sellers commented that currently they intend to stand firm on their prices, given limited availability in the region. PP prices in the region’s local markets have also moved higher over the past week, although local prices have not risen quite as fast as import prices. Producers in Indonesia raised homo-PP prices by US$30/ton last week, raffia offers by an additional US$20/ton at the start of this week. Sellers pointed to persistently limited supply as the main reason for their price hikes. In Vietnam, offers for locally-held import raffia cargoes gained around US$50/ton over the past week while offers for domestic cargoes posted week over week increases of US$80/ton. Most distributors in the country said that they are not planning to make any fresh purchases for now as they are not seeing very strong demand ahead of the upcoming Chinese New Year holidays. Local prices also firmed up by around THB500-1000/ton ($17-33/ton) over the past week in Thailand, with distributors pointing to limited availability and firmer import prices as support for their price increases.