SE Asia’s PP market moves lower on slow demand, softening costs

In Southeast Asia, spot PP prices moved lower over the past week in the face of persistently sluggish demand, weakening regional trends and declining upstream costs as per ChemOrbis. PP prices in the region have been steadily declining for most part of the past month, with homo-PP injection and raffia prices on a CIF SEA, cash equivalent basis declining US$155-160/ton over the course of the past four weeks, according to data from ChemOrbis Price Index. A Southeast Asian producer reduced June prices for homo-PP injection by US$100/ton last week, bringing the producer’s cumulative June price cuts to US$160/ton. A trader reported receiving a PP raffia offer from an Indian producer with a price decrease of US$90/ton last week. The trader elected not to purchase this cargo on anticipation that PP prices would continue to move lower based on poor regional demand. Import homo-PP prices have declined by US$25-60/ton over the course of the past week, with the larger declines coming at the upper end of the range as sellers come under increasingly strong pressure to reduce prices as most deals settle close to the lower end of the overall range. Re-export offers from Chinese traders continue to- one trader in Vietnam is offering Chinese homo-PP to the Southeast Asian market in view of the difficulty faced by Chinese producers in securing deals inside China. Local PP prices have also moved lower in the region over the past week. An Indonesian producer opened the week with price cuts of US$40/ton for homo-PP injection and raffia and US$70/ton for PP film, initiating what could prove to be the fifth consecutive week of declining PP prices in Indonesia’s domestic market. Over the past four weeks, domestic homo-PP prices in Indonesia have posted cumulative decreases of US$210-260/ton for homo-PP injection and raffia and US$190-250/ton for PP film over the past month. Domestic producers in Malaysia announced a second round of June PP price decreases last week, reducing prices by MYR350/ton (US$115/ton) for homo-PP and by MYR400/ton (US$131/ton) for copolymer PP when compared with their initial June price levels. Domestic PP prices have posted cumulative declines of MYR480/ton (US$158/ton) for homo-PP and MYR570-580/ton (US$187-191/ton) for copolymer PP when compared with the late May offer levels. Domestic PP prices also moved lower last week in India, where a distributor reported to have reduced prices by INR4000/ton (US$88/ton) at the beginning of last week. The distributor expects domestic PP prices to witness additional declines of INR2000-3000/ton (US$44-66/ton) in the days ahead, although they believe that the current decreasing trend will soon bottom out in view of the increasing number of price inquires received from their customers recently.