Thailand’s domestic PP prices down 2.5% on excess supply

15 July 2010 09:37  [Source: ICIS news]

SINGAPORE (ICIS news)--Thailand’s domestic polypropylene (PP) prices fell by 2.5% on average in the past week due to surplus supply as local producer Siam Cement started up a new 400,000 tonne/year plant at Mab Ta Phut recently, local distributors said on Thursday. 

Offers of different grades of locally produced homopolymer PP had fallen by Thai baht Bt1,000/tonne ($30.94/tonne) or about 2.5% since last week to Bt40,500-41,500/tonne delivered (DEL), they said. 

"A local producer is offering PP film grade at Thai baht (Bt) 41,000-41,500/tonne delivered, Bt1,000/tonne lower from last week, but the discounted price has failed to attract buying interest,” a local distributor said. 

"Buyers are driving very hard bargains as they know it’s a buyers market now,” he said. 

A second local distributor said; "Buyers are reluctant to buy in large quantities because prices have been falling in the past weeks, and they’re unsure when prices would bottom out.”

There was concern that the oversupply situation would worsen when local producer HMC Polymers started up its new 300,000 tonne/year PP plant at Mab Ta Phut, local distributors said.  

The new PP unit was unable to start commercial production in June as originally planned due to an on-site shortage of propane feedstock, the local distributors said.

Its feedstock supplier, PTT Chemical was unable to supply propane to the new plant because its No 6 gas separation unit was among several major petrochemical projects in Rayong province that were suspended under a court ruling on environmental grounds, they said. 

The distributors expect PTT Chemical’s No 6 gas separation unit to start up in October, and HMC Polymers to start receiving propane then to run commercial production at its new PP plant.

HMC Polymers and PTT Chemical were not immediately available for comment. 

Thailand’s total PP capacity would increase to 1.98m tonne/year after HMC Polymers’ new plant starts up, which would be much higher than its domestic demand estimated at just above 1m tonnes, industry sources said. 

Thailand’s total PP demand was estimated at 990,000 tonnes last year, 4.8% higher than the previous year, according to data from the Petrochemical Industry Club.

($1 = Bt32.32)

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By: Chow Bee Lin
+65 6780 4359



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