Softening local PP prices putting pressure on imports in SEA

Players in Southeast Asia report that import PP prices are beginning to face downward pressure as buyers claim that locally-held prices are more attractive, as per ChemOrbis. Although import sellers are generally standing firm on their prices due to relatively strong sentiment in China, weaker local prices may force sellers to step back on their offers as demand within the region remains stagnant. A woven bag manufacturer in Indonesia commented, “We received stable offers from a major Saudi Arabian producer this week, but we are not interested in import cargoes as we find local prices to be more competitive. We are holding sufficient stocks and are in no rush to purchase as demand for our end products is not very encouraging and we are experiencing some collection problems with our customers.” A trader offering Saudi Arabian homo-PP to Southeast Asia stated that they plan to shift more of their focus to China for now as demand from China is relatively stronger than demand in Southeast Asia. “Most buyers in the region are sticking to the sidelines now and Southeast Asia is beginning to lose its traditional premium over China,” the trader reported. A Thai producer offering at the top end of the overall import range said that they kept their prices unchanged on the week, although they added that they are willing to consider some discounts for their regular customers. “Our availability is limited due to a production issue at one of our plants. We are not receiving many inquiries for now, but we hope to get a clearer idea of the market direction now that the Chinese market has returned following the National Day holidays,” a producer source reported. An agent of a Saudi Arabian producer said that they held their prices to the region stable. “We are not all that optimistic about the demand outlook, but we believe that limited supplies will help keep PP prices mostly steady during the fourth quarter,” the trader said. According to ChemOrbis, a Philippine converter in the food packaging sector said that they received an offer for domestic materials with a PHP550/ton ($13/ton) reduction from the prior week. “Local prices are moving lower as demand is not so great and the peso has regained some lost ground against the dollar. We are hesitant to purchase for now as demand seems to be sluggish in most major global markets,” the buyer said. A distributor based in Thailand reported that buying interest is sluggish even after domestic producers agreed to some reductions on their prices recently. “Our customers are placing lower buy ideas even after our most recent price cuts. Demand is not strong and recent flooding in some of the major industrial areas of the country has further hampered buying interest,” the distributor stated. Another Thai distributor concurred, commenting that market prices have moved lower over the past week even though producers are trying to remain firm on their list prices.