SINGAPORE (ICIS)--Polyolefin importers in the Gulf Cooperation Council (GCC) are looking forward to improved demand in September after a summer season lull, market sources said on Friday.
Offers are expected from suppliers next week onwards as normal business resumes in the region. Business activity is also likely to resume to normal in early September, as summer holidays draw to a close in end-August and most market players are expected to be back to replenish stocks, sources said.
Owing to the high temperatures recorded in most countries, business activity slows as people usually travel out of the region for vacation, a UAE-based trader said.
According to the trader, although most facilities were operated as per normal in the last two months, the processing of deals and the associated paperwork were slow, hampering imports and trade, sources said.
“We were earlier expecting a reduction in September PE and PP offers because of weak crude. But now that crude has recovered and even C2 [ethylene] and C3 [propylene] are firmer, looks like a price reduction is not possible,” the UAE-based trader said.
Importers in the region also looked to receive a clearer price direction from Turkey and other European markets, sources said.
Much of the demand in Turkey and Europe is met through imports from suppliers based in the GCC. Weaker sales in these key markets are likely to lead suppliers to push more volumes in other markets, capping the likelihood of a price hike.
Polymer demand in Turkey has remained weak ever since the failed military coup attempt on 15 July, while European demand is only expected to recover mid-September onwards when importers are back from their summer holidays, sources said.
“Looking at these factors, we expect a rollover in prices when offers are announced next week,” the UAE-based trader said.
HDPE film import prices in the GCC were assessed at $1,130-1,180/tonne CFR (cost & freight) India in the week ended 19 August, stable from the week before as the bulk of imports for August were completed early in the month.
HDPE film import prices in the region have seen limited gains owing to ample availability from regional suppliers that has also led to buyers refrain from holding buffer stocks, market sources said.
“There is a lot of product available from producers here. Also, voyage time is barely a few days. So buyers are no longer interested in building stocks at their facilities, “ market sources said.
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