29 June 2011 08:01 [Source: ICIS news]
The weak buying interest has led PP producers to reduce their offers in a bid to attract customers, the industry players added.
Offers for July PP raffia material were at $1,440-1,450/tonne (€1,008-1,015/tonne) CFR (cost & freight) Karachi on 29 June, while price discussions in China were at about $1,450/tonne CFR.
Offers for July shipments of PP raffia products from the Gulf Cooperation Council (GCC) region, which entered the market on 20 June, were priced up to $100/tonne lower compared with the week before 20 June discussions at $1,520-1,540/tonne CFR Karachi.
Mounting inventory pressure on producers in the GCC region has forced them to reduce their offers increase their sales volumes, causing offer prices to fall further from last week.
Converters were buying on a need-to basis and are expecting prices to fall further in line with softer
A Saudi Arabian major reduced its offers for July cargoes by $10/tonne to $1,440/tonne CFR Karachi, LC (letter of credit) 90 days on 28 June as buying ideas remained in the low-$1,400s/tonne CFR Karachi.
A second Saudi Arabian producer maintained its offers at $1,450/tonne CFR Karachi, LC 90 days for July parcels from last week. It withdrew its price protection of their customers early last week.
A price protection refers to the new prices that buyers receive when a price adjustment is made by a producer.
A producer based in the GCC region announced its offer for July at $1,450/tonne CFR Karachi, LC 60 days on 20 June and managed to sell sporadic cargoes at $1,430-1,450/tonne CFR Karachi early this week.
“$1,400/tonne [CFR Karachi] is too low. The lowest we can go now is $1,430/tonne [CFR Karachi] based on the price movements in
A second producer from the GCC region offered its parcels at $1,450/tonne CFR Karachi for July cargoes on 28 June, LC 90 days, but is willing to seal its cargoes at $1,440/tonne CFR Karachi if buyers are keen.
A third Saudi Arabian producer offered its PP raffia lots for July at $1,450/tonne CFR Karachi, LC 90 days.
“We have to sell some volume this week before Saudi Arabia’s National Petrochemical Industrial (NATPET) and PetroRabigh start to offer [their parcels] in early July after restarting [their plants]. Sales have been minimal in June and we can’t afford poor sales again for July shipments amid our high stock levels,” the Saudi Arabian producer said.
“Prices may change again later this week, especially [since] trade is still very slow,” a Karachi-based trader said.
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