Malaysian buyers responded positively to latest local PP, PE offers

As reported last week, a major Malaysian producer has announced fresh PP and PE offers for April delivery to local market with MYR230/ton ($52/ton) reduction for PP and LDPE and MYR200/ton ($45/ton) cut on HDPE cargoes. Buyers in the country appear to be positive about the price cut and many have returned to make replenishment after several months of purchases hand to mouth basis.

In fact, tight local supply has been keeping domestic prices on the firming trend over the past couple of months despite weakening regional market. Converters were unable to accept high raw material costs amid slow end product businesses. However, several HDPE bags makers reported this week seeing visible improvement in end product orders ahead of the Ramadan season, signaling brighter prospect for the near term outlook. A market source added, “We are running low on inventories while end product orders are coming in, therefore we procured larger than usual quantity this month.”

On the other hand, players are also expressing concerns over the sustainability of the current buying interest condition as market normally slow down during the fasting month. “We plan to buy two months worth of stock to avoid delivery issues that usually occur during the Ramadan. Our end product business is regular at the moment,” another converter reported.

Players in the country also reported limited availability of LLDPE film, from which the producer did not open offer for this grade this month. A good number of deals have been reported this week and the supplier might close offers by tomorrow, 5 April 2017.