Malaysia local producer increases PP offers; sees buyer resistance

Johanna Truong

29-Jul-2016

Polypropylene - plastic packaging
SINGAPORE (ICIS)–A major Malaysian producer of polypropylene (PP) hiked offers for August-delivery cargoes, weakening buying sentiment among converters, market sources said on Friday.

The producer adjusted offers higher in view of limited supply from ASEAN producers and the uptrend in the local trade in Indonesia, according to a market player.

Offers for most PP grades were increased by Malaysian ringgit (M$) 230-280/tonne from offers for July deliveries. PP flat yarn and injection grades were available at M$4,840-4,900/tonne DEL Malaysia.

Offers for PP flat yarn/injection grades rose to $1,200/tonne DEL Malaysia, facing resistance from buyers. The supplier targeted the same level for export cargoes to Indonesia.

Non-dutiable Thailand cargoes were offered at $1,170/tonne CFR (cost & freight) Malaysia and attracted little buying interest, as the gap between import and domestic prices is not wide enough to make up for arising logistics import costs.

Some trader said that the price hike would lower the trading volumes, citing the weak demand and converters procuring on a hand-to-mouth basis.

PP flat yarn prices were assessed at $1,050-1,160/tonne CFR Indonesia at sight in the week ended 22 July, ICIS data shows.


Top image: Propylene goes into the manufacture of polypropylene, which is used in food packaging. (Source: PhotoAlto/REX/Shutterstock)

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