FocusPolitics stalls Pakistan’s polymer trade

By Prema Viswanathan

SINGAPORE (ICIS news)--Political turmoil, the local stock market crash, declining crude and weak sentiment in China have brought polymer trade to a standstill in Pakistan, suppliers and buyers said on Tuesday.

The ongoing efforts to impeach Pakistan’s president, Pervez Musharraf on charges of violating the constitution had unsettled the polymer market, traders said.

"The confidence of the market was already shaken by short-selling by smaller traders who suffered heavy losses in the local stock market," said a Karachi-based trader. "The political uncertainty has added to their woes, dampening buying sentiment further," he added.

Traders lost around 10-12% of their investments when the Karachi stock market crashed to a two-year low early this month, after falling by 37% over the past three months, a second trader said. "The losses, coupled with the margins squeeze they have been suffering lately due to high prices, have severely curbed liquidity in the polymer market," he said.

Falling crude and slowing demand in China had contributed to the halt in trade in the Pakistani polymer market, suppliers said.

The 3% depreciation in the value of the Pakistani rupee over the past seven days also curbed buying interest, they added.

"There is no appetite for imports in Pakistan right now, even though customer inventories are low for some grades, such as high density polyethylene (HDPE) film and polypropylene (PP) raffia," a supplier said.

Prices were assessed at $1,930-2,000/tonne CFR Pakistan for PP raffia grade and at $1,870-1,910/tonne CFR Pakistan for HDPE film last Friday, down $60-100/tonne and $20/tonne respectively from the previous week, according to global chemicals market intelligence service, ICIS pricing.