Pakistan PP imports hit by $70-75/tonne price gap

12 May 2006 07:41  [Source: ICIS news]

SINGAPORE (ICIS news)--Imports of polypropylene (PP) into Pakistan have virtually ground to a halt due to an unheard $70-75/tonne gap between bids and offers, traders said on Friday.

Offers of raffia and injection grade PP have surged in the last week by $50/tonne to $1,240/tonne CFR Pakistan on tight supply in Asia and a robust China market. Despite this, bids from major traders and end-users in Pakistan fell by $10/tonne to $1,180/tonne due to customer resistance on the back of surplus domestic supply.

"Supply is plentiful  as the volumes imported in April have still not been absorbed in the local market. So bigger customers are in a position to resist the high offers," a Pakistani trader said.

Only small customers whose inventories have hit bottom have been forced to take up the high offers for small 50-tonne lots. Traders and larger customers were biding their time in expectation of a reduction in prices in June as they have sufficient inventories to last them for the next few weeks.

"Late last week, an Indian supplier was offering raffia-grade material at $1,200/tonne, which was rebuffed by buyers. But this week offers from global suppliers are as high as $1,250/tonne,'' said a trader. Offers for film grade PP were even higher, at $1,265/tonne CFR, he added.

"It does not make sense for customers to buy cargoes at such high prices when they are not sure they can pass on the high polymer costs to their own end users," a second trader said.

Offers have also surged in China but customers there were less resistant as inventories are low after the week-long Labour Day break which ended on 7 May. Chinese prices of raffia, injection and film grade PP have all surged by $50/tonne in the last two weeks to $1,200-1,220/tonne CFR China.

By: Prema Viswanathan
+65 6780 4359

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