South East Asian players predict post-holiday conditions

In Southeast Asia, current trading activity in most polymer markets is limited due to the Ramadan holidays, which is keeping many players in Indonesia and Malaysia out of the market, as per Chemorbis. With holiday business winding down, players are beginning to focus on their expectations regarding the likely direction of the market in the post holiday period. In the PVC market, regional producers had announced September offers to the domestic markets with increases of US$16-60/ton when compared with August offer levels. Producers' new September offers are not meeting with much interest for the present as demand has been disappointing so far. Slower than expected September demand has pushed some producers to concede to increases smaller than they had hoped for while other sellers are looking to expand their sales to the export market. Sellers are currently predicting that prices will remain firm in the post-holiday period based on higher VCM feedstock costs, although most now feel that they will not be able to achieve any significant upward movement in prices after buyers return to their desks in mid-to-late September. Sellers in the region’s PE markets had also announced higher prices for September in the weeks immediately prior to the holidays while showing a general unwillingness to concede to discounts. Sellers pointed to firm ethylene feedstock costs as well as tight supply as support for their price increases. Converters said that they were in no rush to make new purchases ahead of the holidays as stock levels were sufficient to meet their needs for the first few weeks after the holidays. Although some converters reported that demand for their end products was beginning to pick up, they do not believe demand will be strong enough to support sellers’ September price increase targets after the holidays have ended. The increasing trend in the PE market stands out clearly in this graph from ChemOrbis Price Wizard, which also indicates the fact that PP sellers are looking for higher prices this month. In the PP market, sellers generally left their offers unchanged heading into the holidays, citing strong upstream costs and limited availability as support for their firm stance on their September prices. Buyers have proven unwilling to accept sellers’ increase targets for September yet, with some converters saying that they are planning to reduce their monthly purchases by as much as 50% if sellers remain unwilling to agree to some discounts on their prices. As demand remains relatively limited and rising supply levels have begun to weigh down spot propylene feedstock prices, most buyers are predicting that sellers will be forced to reduce their PP prices towards the end of September.