Many packaging converters across the globe have been reporting subdued demand for their business as per the pricing service of ChemOrbis. Slower growth figures for major economies and lower import volumes for many markets in several regions have also affirmed the weak market conditions recently. This is indeed the main reason behind converters’ long waiting stance in many global markets, particularly for PE, where global prices have been on a downward trend since mid-March.
Starting with Asia, a film producer in East China commented, “We are receiving lower offers for PE this week. However, we don’t plan to buy for the moment as we have been working with 60-70% operating rates recently. Therefore, we will keep waiting for a while longer.” In North China, an agriculture film producer said that they continue to buy on a needs only basis. “As we are in the low season for film applications, we are working at a capacity of less than 50%,” he said. He also voiced his expectation about seeing lower prices in the days ahead, which makes him refrain from building stocks in the near term.
In Indonesia, a packaging manufacturer also said, “We have received $10-20/ton lower offers from a Saudi Arabian producer when compared to last week. However, we don’t have any intention to replenish stocks for now as our orders for food packaging and shopping bags are performing very slowly and we have high stocks of finished goods.”
In India, a buyer manufacturing sheets for food packaging also reported having to lower his production rates due to slow demand. “We don’t think that a rebound is likely for the near term. We would like to monitor the market without engaging in new purchases for the present,” he said. Local PE supply is limited, according to players in India, which renders the market outlook relatively firm, even though weak demand and lower upstream costs seem to be overshadowing supply concerns for now.
When looking at the Turkish market, there are similar complaints being pronounced. A shopping bag manufacturer lamented, “Our business is so slow. We can hardly do any export business these days.” However, some converters have started to sound relatively hopeful for their end product orders this week. Another PE converter manufacturing shopping bags said, “Our end product demand has started to show some slight revival recently and we expect to see better demand by May and June.” A third PE converter said, “Our end product business has showed a small recovery recently as the agricultural industry has become more active in line with the start of spring.”
In Italy, packaging converters are voicing similar complaints about limited demand but they remain optimistic about a revival. Still having stocks to run down, many buyers are shying away from new purchases and waiting for further decreases to emerge in May. “Our high season is yet to begin and therefore, our sales are not so good. We are hoping for a revival in the next few months,” a PE converter said. According to ChemOrbis, a food packaging manufacturer in Italy commented, “We have purchased some cargoes this month as it will be our high season next month. In the meantime, our exports to Germany are performing well.”