06 June 2012 05:53 [Source: ICIS news]
By Chow Bee Lin
Price weakness in the Chinese polymers markets may prevail until August or September, when restocking activities begin, they said.
Sharp falls in naphtha and crude prices since 1 June have dampened sentiment in the PE and PP markets, with a number of importers expecting prices to fall in July, or at best hover around the June levels.
At noon, US crude futures were trading at $84.77/bbl, while Brent crude was at $99.27/bbl.
There are concerns that
Importers might decide to come back to the market in August and September to procure cargoes, since most plastics traders and processors in
Most importers have refrained from building up inventories given uncertainty in global demand amid the ongoing sovereign debt crisis in the eurozone, they said.
“The eurozone crisis is like a time bomb,” one of the processors said.
Some plastics distributors said they expect downstream demand to improve in August and September, as plastics processors are expected to ramp up production ahead of the year-end consumption in the local and export markets.
Downstream demand would get a further boost if monetary easing policies are introduced in
Other industry sources were less optimistic about the impact of monetary easing policies.
“The problem is that demand is very weak because people are not spending,” the Taiwanese resin producer said.
($1 = €0.80)
Additional reporting by Amy Yu, Angie Li
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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