In Thailand, demand for PP and PE has been considerably affected by unstable economic sentiments and political uncertainty over the past couple of months. The local polyolefin markets have tracked a mostly stable to slightly softer trend since early 2019 in the face of persistently limited buying interest.
Thai economy hit by US-China trade war
Thailand’s economy grew at the slowest pace since 2014 in the first quarter of 2019 as the escalating US-China trade war hit the country’s exports, which account for more than 60% of its gross domestic product.
Intensifying concerns about the trade war have also curtailed the country’s demand for polyolefins, pushing Thai buyers to the sidelines amid the uncertainty surrounding the global economy.
A PP distributor noted, “Manufacturers are struggling with cash flow issues as a result of a challenging economic environment, which has reduced demand. Buyers are not interested in making fresh purchases if they are not offered an attractive discount.”
Post-election uncertainty adds to weak sentiment
Thailand has faced political uncertainty since final results from the March 24 general election were revealed on May 9 without a clear winner. Although the new parliament has recently elected the prime minister, the country’s polyolefin market is yet to recover from the uncertainty that lasted several weeks.
Lower-priced import offers
Several players in Thailand commented that the local PP and PE markets are under downward pressure from competitive imports, particularly for Chinese and US origins.
“Local prices are mostly stable this week, however domestic producers face pressure from cheaper imports. We have received a very competitive LDPE film offer from China recently,” a distributor said.
A few converters also opined, “We are keeping our inventories low for now and we expect that the market will remain on a stable to softer trend in the short term. Local producers may reduce their prices in order to preserve their market share against the threat of competitive imports.”