Thai, Indonesian PP makers raise August offers on rising C3 costs

11 July 2012 10:08  [Source: ICIS news]

SINGAPORE (ICIS)--Polypropylene (PP) producers in Thailand and Indonesia have raised their offers for August shipments to match the recent spike in prices of feedstock propylene (C3), industry sources said on Wednesday.

But the higher prices may hamper PP trades because domestic demand has not been particularly strong, they said.

In Thailand, domestic producers have raised their offers for PP homopolymer grades this week by Thai baht (Bt) 2/kg to Bt47.00-47.50/kg ($1.5/kg) DEL (delivered), local distributors said.

In Indonesia, Chandra Asri raised its DEL offers for different PP grades by $20/tonne (€16/tonne) to $1,570-1,620/tonne for homopolymers, to $1,610-1,720/tonne for random copolymers and to $1,550-1,570/tonne for impact copolymers, a company source said.

Spot propylene prices in the region were assessed at $1,200-1,230/tonne CFR (cost and freight) southeast Asia in the week ended 6 July, $40-50/tonne higher from the previous week, according to ICIS.

Thailand’s PP demand was not particularly strong because demand for rice packaging, a key application for yarn grade PP, had been weak, local distributors said. Higher rice prices stemming from a recent policy in Thailand aimed at guaranteeing profits for domestic rice farmers have dampened demand for the polymer, the distributors said.

PP yarn grade demand from the other two key applications, namely sugar and fertiliser packaging, is seasonally low and is expected to improve only from October, they added.

Indonesia’s end-users and stockists are expected to start restocking over the next 10 days for delivery in early August but the volumes might be capped by the narrower delivery window in August, local distributors said.

Indonesia’s delivery window would be narrower in August because container transportation would not be allowed after 13 August, with passenger transportation given priority in the run-up to the week-long Hari Raya holiday due from 19 August, they said.

($1 = BtN31.70 /  ($1 = €0.82)

By: Chow Bee Lin
+65 6780 4359

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