SINGAPORE (ICIS)--Polyethylene (PE) trade for cargoes originating in Qatar remains uncertain in the wake of the diplomatic rift between Doha and major Gulf Cooperation Council (GCC) members led by Saudi Arabia, market sources said on Thursday.
Deals and discussions for June-lifting Qatar-origin PE cargoes were previously completed in late May, but the fate of these shipments now hangs in balance, the sources added.
According to an importer based in United Arab Emirates (UAE), deliveries from Qatar were stopped following the closure of the UAE-Qatar border.
“Banks have advised us not to execute any payments for now,” a UAE-based importer said.
Sales representatives for Qatar-based PE producers have asked their customers in the GCC to wait until further clarity on the political situation emerges, leading to a lot of nervousness in the market, the UAE-based importer said.
According to a trader based in UAE, the response from regional buyers to the crisis was mixed.
Some end-users began enquiring for additional volumes for June-lifting Saudi and Kuwait-origin cargoes given that shipments from Qatar are poised to be delayed, the trader said.
However, some buyers were more certain of a political resolution in the near-term and preferred to wait for further clarity, the trader said.
Demand for high density PE (HDPE) blow moulding in the GCC region has improved from that in the previous week, a Saudi HDPE producer source noted.
“Last week, the response to our offers at $1,230-1,240/tonne DEL (delivered) GCC was subdued. However, this week we have received bids from a few customers at $1,250/tonne DEL GCC, which is up $10-20/tonne from our initial offers,” the producer source said.
Demand for HDPE blow moulding is seasonally strong, as buyers look to restock inventories for the Eid ul-Fitr festival in late June, when demand for food packaging containers and other items like cosmetics peaks.
The absence of Qatar-origin HDPE blow moulding product spurred a few regional importers to seek product at firmer prices, the producer source said.
Over in India, importers were informed of a two-week delay in their shipments following the political developments, an Indian importer said.
The southeast Asian PE market has also witnessed a lot of nervousness in the wake of the Qatar crisis since Qatar-based producers hold a significant market share in the region, market sources said.
Some market players opined that an embargo of trade to the Middle East meant that Asia is likely to see an increase in Qatar-origin PE.
However, many others were uncertain of this as well, as ports of call in the GCC have banned all Qatari flagged/owned vessels and even those vessels going to or coming from Qatar.
According to an Indian importer, Qatari ships would possibly look at Singapore as the port of call while moving material to Asia.
Movement of PE from Qatar to Jordan was also affected by the recent political movements, a Jordan-based importer said.
“Qatari producers would now have to ship out material via sea-route instead of land since the Saudi Arabian border was closed,” the importer said.
However, this would result in longer voyage times and higher costs which would not work, the importer said.With the Jordanian government also joining the Arab powers to boycott Qatar, it is unlikely any trade to Jordan will take place even via sea, the Saudi HDPE producer said.
Top image: Marina, The Pearl, Doha, Qatar. Photographer: imageBROKER/REX/Shutterstock Focus article by Veena Pathare We are interested in your views on data providers for price assessments, indices, news and analysis for the petrochemicals markets. This is your chance to express your views on the data and information sources you use. It will take less than five minutes to do.
Focus article by Veena Pathare
We are interested in your views on data providers for price assessments, indices, news and analysis for the petrochemicals markets. This is your chance to express your views on the data and information sources you use. It will take less than five minutes to do.Click here to tell us what you think