S. Asia players: Thailand homo-PP supply is tight

Players in Southeast Asia reported an apparent tightness in homo-PP supply from major Thailand producers recently, which resulted in a drastic upsurge in the offers for this origin in the past one month. In fact, CommoPlast data showed that Thailand homo-PP raffia and injection offers to Indonesia have jumped $175-190/t since beginning of February 2016 to reach $1130/t CIF Indonesia, LC AS term this week.

Buyers attributed the supply shortage to scheduled production switch and some technical issues taking place. A Thai trader informed, “One of local producers can only provide minimal number of homo-PP cargoes to domestic buyers as they are focusing more on making copolymer grade at the moment. Meanwhile, another producer is facing technical difficulties at the homo-PP line, adding more tension to the already tight market.” 

A Thai producer responded to this issue saying, “We can’t comment much on our marketing strategies, however, we do plan to pay more attention to PP copolymer grades in the next couple of months. Therefore, supply for homo-PP might remain tight during this period.”

The Indonesian market meanwhile has been seeing healthy demand for homo-PP raffia grade as woven bag makers are preparing for the harvest season. Receiving announcement from a Thai major regarding non-availability of cargoes during April and May period has worrisome many buyers. A converter commented, “Local spot supply is also not very comfortable as we can’t even purchase more than 200 tons each time now. We were initially expected for some relief in May, however we might need to plan our replenishment again after received announcement from regular Thai supplier.”