SEA players: Thai's SCG might reduce HDPE, PP export allocation for July

Buyers across Southeast Asia market reported to have received information from major Thailand producer – SCG that allocation for July might reduce by up to 50 per cent due to low plant run rate.

As CommoPlast reported earlier, SCG took its number 2 PP line off-stream on 9 June 2017 for a brief maintenance of approximate 10 days. The line is able to produce 160,000 tons/year. An Indonesian buyer said, “We were informed that supply for PP thermoforming from the Thai maker for July shipment would be limited, therefore we decided to replenish some cargoes from local market.”

Vietnamese buyers also received similar information from the producer that July allocation for HDPE might reduce by up to 50 per cent due to lower operation rate. A source close to the producer informed, “We were not able to source sufficient ethylene from open market, hence we are unable to supply regular quantity of HDPE to our customers this month. And due to reduced sales pressure, we plan to implement $20/ton hike on both PP and PE cargoes in the near term.”

It is still unclear on how this would impact the market, as Indonesian and Malaysian buyers would start going for Ramadan holiday next week, which might take away a great portion of demand. The state of post-holiday replenishment activities therefore would play an important role in determining the market trend in July.