03 October 2008 06:10 [Source: ICIS news]
By Prema Viswanathan ?xml:namespace>
SINGAPORE (ICIS news)—Polypropylene (PP) and polyethylene (PE) trade in both the Middle East and South Asia had been paralysed by recent collapse in prices, which declined by as much as 20% from a month ago, market sources said on Friday.
In what was seen as the sharpest month-on-month price decline in a decade, shocked buyers retreated from the trading arena in anticipation of a further decline in spot prices.
“I would rather wait for prices to bottom before buying any cargoes,” said a Pakistani PE processor.
“Prices have been tumbling almost every day, so it is very hard for us to make any purchasing decisions,” he added.
PP raffia, a key grade in the region, was assessed at $1,520-1,550/tonne CFR (cost and freight) in the Gulf Cooperation Council (GCC) region and $1,390-1,475/tonne CFR India last week, down as much as $340/tonne compared to prices a month earlier, according to global market intelligence service ICIS Pricing.
Also, high density polyethylene (HDPE) film was down around $250/tonne to $1,560-1,580/tonne CFR GCC and $1,480-1,500/tonne CFR India.
Buying activity in the Middle East and ?xml:namespace>
“There is plenty of material around, so there is no rush to buy cargoes. And there is no clear indication of where the bottom is, so we will just wait and watch,” said an Oman-based polyolefins end-user.
The gloomy global economic outlook exacerbated by the
“About 80% of our exports are to the
Hence most end-users and converters could afford to keep low inventories, despite September-October supposedly being the peak demand season in
Margins of end users have been badly hit since the beginning of this year due to persistently high polymer prices which saw their highest levels in over ten years.
“The good times could not go on forever, so we are expecting prices to soften in the third quarter,” said a PP supplier.
However, the rapidity and steepness of the recent price falls took everyone by surprise.
“The way prices fell in September was nothing short of a mudslide, and we are finding it very hard to pacify end users who had purchased at prices $250-300/tonne higher just a month ago,” said a Dubai-based trader.
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