Published On: Fri, Jan 13th, 2012

Polymer demand improves in Thailand after floods

Polymer demand improves in Thailand after floods

Polymer demand improves in Thailand after floods

Players in Thailand have been reporting improved demand since the start of 2012 as the market recovers from devastating floods that occurred last year as per the pricing service of ChemOrbis.  Polymer prices are reported to be generally higher compared to December and restocking is now being reported.

Thailand experienced its worst flood in 50 years starting in late July 2011.  Floods continued for over two months, covering more than two-thirds of the country. Hundreds of factories were forced to shut down, which had dampened demand for polymers.

A manufacturer in Thailand who makes parts for TVs, cars and other electrical appliances exclaimed this week, “Demand is very good now that the country has started to recover from the flood.” He also made note of the fact that raw material prices are higher now compared to December.

A trader selling PS and ABS materials confirmed the improved demand. He said, “Demand has improved and there are many converters who would like to buy now but we don’t have enough material to sell.  I believe the domestic producers are trying to keep the market short by limiting their allocations but they are meanwhile selling directly to converters.”

A distributor complained of a similar problem in the PE market. The distributor who was offering domestic LDPE, HDPE and LLDPE said, “Demand has recovered as the floods have eased but supply is limited. Converters have depleted their stocks during the flood and now they have no choice but to buy at the current price levels, but we have not received an offer from our principal because they have no allocation for us.”  He also complained that the domestic producers are holding all the power in the market and he does not find it profitable now to be a distributor in Thailand.

A plastic bag maker complained of difficulties finding LDPE supply in the country although he did not have a problem with HDPE.  He said, “Thailand is short of LDPE stock, but we still prefer to buy locally since import prices end up to be the same as the domestic offers after adding customs duties, plus they take longer to arrive.”  A second plastic bag maker complained about having difficulty finding LLDPE supplies in the country and noted that prices for both HDPE and LLDPE were raised compared to last month.

Due to reconstruction, the PVC sector in particular has reported a pick-up in market activity since the year began.  A distributor reported raising his PVC prices this week compared to December noting, “The construction sector has picked up a lot, there is especially demand for pipes as per the pricing service of ChemOrbis. We are optimistic that local demand will remain firm next month as well.”  Other distributors in Thailand concurred that demand has picked up in the country because of the improving construction sector.

A source at a domestic producer said, “We will announce export offers soon, but we are considering offering at higher prices compared to other regional suppliers because our export allocations are limited due to increased domestic demand. Demand from the construction sector has increased after suffering from the destruction caused by the floods. We expect another round of price increases in February as well.”  A second domestic producer reported that local demand is good and they have already wrapped up their export orders and are not taking any more orders for now. Although the producer was able to return to normal production following previous feedstock shortages, their export allocation was limited due to the improved domestic demand.