Players report tight PP supply in Southeast Asia

Players in Indonesia, Thailand and Vietnam are reporting reduced availability for PP amid prices that are following a stable to firm trend, as per ChemOrbis. Local PP prices gained in Indonesia this week and continue to hold steady in Thailand and Vietnam. A Southeast Asian producer raised domestic PP prices in Indonesia by another US$10/ton after issuing increases of US$20/ton last week. A source from the producer pointed to tight supply, especially for homo-PP raffia and thermoforming grade, as the main reason behind their latest increases. “Most buyers were holding sufficient stocks last week, but the firmer dollar parity may result in a pick-up in buying interest. We expect supply to improve in July after some producers resume operations while trading activities will slow down due to Ramadan,” he added. Reports of reduced availability do not appear to be causing concerns among Indonesian buyers, most of whom have sufficient stocks for now. In addition, several converters reported facing difficulty in raising their end product prices in line with higher production costs and others expect trading activities to lose speed in the upcoming days due to Ramadan. A woven bag producer confirmed receiving higher offers from the producer this week. The buyer reported that he has enough stocks for the first half of June and added that he is planning to delay his purchases until demand improves. Another converter commented, “We are covered until mid-June and we are waiting to have a clear view about the outlook for the second half of July, when we project some softening due to Ramadan. Although local producers are continuing to raise their prices for raffia, we cannot reflect higher costs onto our prices due to resistance from our customers.” PP prices in Thailand are mainly stable this week due to buyers’ resistance to higher prices after sellers took a firm stance on their prices towards the end of May, citing limited availability. A distributor reported that he managed to maintain his prices for PP on the back of tight supply in the local market this week while conceding to some discounts for PE. In Vietnam, a Taiwanese producer rolled over their prices from last week while adding that their supply is short for PP copolymer owing to relatively better demand for this product compared with homo-PP. A producer source commented, “We heard rumors of a possible shortage for Middle Eastern PP copolymer that may last until September.” According ChemOrbis, in production news, Indonesia’s Polytama Propindo’s PP plant in West Java has been offline since early May due to a feedstock shortage. Though the 380,000 tpa plant is expected to resume operations this month, the restart date is still unclear. Lotte Chemical Titan is expected to shut a 200,000 tpa PP plant in Pasir Gudang, Malaysia for maintenance from mid to end May. PetroVietnam was planning to conduct a two-month planned maintenance shutdown at their 150,000 tpa PP plant between May and June.