Saudi PE, PP makers cut Sept offers to Pakistan by $20-30/tonne

23 August 2011 11:53  [Source: ICIS news]

SINGAPORE (ICIS)--Saudi Arabian polyethylene (PE) and polypropylene (PP) producers have lowered their offers for September cargoes to Pakistan by $20-30/tonne (€14-21/tonne) from the settlement prices in August, industry sources said on Tuesday.

Buying interest in Pakistan is currently low - influenced by weakness in the leading Chinese polymers market - prompting Middle Eastern producers to cut their offers in the south Asian country, they said.

A key Saudi producer lowered its offer for September linear low density PE (LLDPE) film cargoes to $1,380/tonne CFR (cost and freight) Karachi, and for high density PE (HDPE) film shipments to $1,430/tonne CFR Karachi, LC (letters of credit) 90 days.

New offers for PP raffia were at $1,550/tonne CFR Karachi, PP injection at $1,560/tonne CFR Karachi and $1,580/tonne CFR Karachi for IPP (isotatic PP) film, they added.

“We expected such discounts for September but bookings are unlikely to come through this week because the Eid break is just next week,” a Karachi-based producer said.

The month-long Ramadan or the Muslim fasting month will culminate with Eid-al-Fitr holiday on 30 August.

A second Saudi maker made a similar move late on Monday and offered September PP raffia cargoes lower at $1,580/tonne CFR Karachi, LC 60 days, down by about $20/tonne from August’s settlement price.

A third Saudi maker also announced a lower offer for PP raffia on Tuesday at $1,550/tonne CFR Karachi, LC 90 days, for September arrivals

Despite the lower offers from Middle Eastern suppliers, buyers in Pakistan said that actual transactions at those levels may not happen given weakness in demand.

“Whether deals can be concluded at the announced offers, the chances are pretty slim. The problem is many of the converters have no interest in buying,” a second Karachi-based trader said.

Pakistani converters are in no hurry to procure polymers as inventories of HDPE and LLDPE film remained quite high in the domestic market.

Some cargoes bought by Pakistani importers in July and August are still stuck in Saudi Arabian and Abu Dhabi ports.

($1 = €0.70)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Ong Sheau Ling
+65 6780 4359

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