Print

After several weeks of continuous price increment, several Southeast Asian suppliers have started to loosen the firm stance on their cargoes, offering discount to encourage purchasing activities in the face of stiff buyer resistance.

In fact, Indonesian buyer reported several deals for Philippines homo-PP yarn at $1195/ton CIF, LC AS term this week, some $25/ton lower than initial prices. A buyer commented, “Domestic material remains competitive this week since actual demand in Indonesia is not supporting such rapid and aggressive hike observed in the import ground recently. Even with the discount, we are not really confident to make large purchases.”

On last Friday, Vietnamese homo-PP was reported at $1200/ton CIF Indonesia, down $30/ton from initial offer with a buyer said, “We placed bid at $1180/ton with the same term for this cargo, yet our supplier refused to accept. At the moment we are not ready to accept prices above the $1200/ton threshold. Market outlook appears to be bearish with demand in China hold flat. We expect pressure to build up in the near term if re-export material continue to pour into Southeast Asia region.”

The resistance is so strong that traders, who are not willing to cut offers, have decided to divert their available quantity to other market with hope to achieve better margins. An international trader offered Thailand’s homo-PP at $1280/ton CIF Indonesia, LC AS term informed, “Indonesian customers are not accepting this price claiming lower local prices at the moment. We are diverting the cargo to Vietnam since it appears that demand in this market is the healthiest in the region at the moment.”

At the moment, local traders are offering homo-PP based on delivered term at the range $1260-1270/ton FD Indonesia. Buyers would be able to obtain $10-15/ton discount depending on the payment term. This makes domestic material more competitive, discouraging the interest for import cargoes. Meanwhile, import homo-PP from non-dutiable origin to the country is reported at $1195-1280/ton CIF Indonesia, LC AS term.