Thailand's Siam Cement Group (SCG) is expected to shut its selected polyethylene (PE) and polypropylene (PP) plants for planned maintenance in November, tightening the availability of duty-free supplies to regional converters.
The producer will shut its 152,000 t/yr low-density PE (LDPE) plant from early November for a month-long maintenance, tightening the supply of LDPE lamination or coating grades. SCG will also shut its 140,000 t/yr PP plant from mid-November for a week-long maintenance. Its largest 400,000 t/yr PP plant will be shut from late November for a two-week maintenance.
The maintenance plans could keep domestic PP prices in Thailand firm in the short term because of supply tightness and gradually gains in demand. Thailand began allowing vaccinated individuals quarantine-free entry and travel into the country from 1 November to boost its tourism sector, which could support its consumption of finished plastic goods.
But high domestic PP prices prompted some Thailand converters to seek lower cost imports to meet stronger demand demand despite uncertainty in shipment arrivals, among them the China-origin PP supplies. The competitive offers of China-origin PP and moderate lead times to southeast Asia attracted high buying interest among regional converters.
Domestic PP prices in Thailand stood at $1,410-1,450/t on an import parity basis this week, according to local sources. Argus assessed China-origin PP raffia prices at $1,240-1,260/t fob China on 5 November, while freight rates from China to Thailand were at around $70/t, resulting in a workable arbitrage.
Most southeast Asian producers kept PP offers stable because of tighter regional supplies from the planned and unplanned shutdowns. But the re-emergence of competitive China PP offers to southeast Asia in the past two weeks weighed heavily on regional sentiment.
Thailand's HMC Polymers restarted its PP plants with a combined capacity of 560,000 t/yr of PP earlier this week after planned maintenance. But two Vietnam-based producers unexpectedly shut their PP plants recently because of technical issues and feedstock shortages. Vietnam's NSRP shut its 370,000 t/yr PP plant from the end of October because of technical issues, and is expected to restart the plant by end of this week. Vietnam's Hyosung shut its upstream 600,000 t/yr propane dehydrogenation plant in late October, but further details were unclear. The producer shut its two 300,000 t/yr PP plants this week with the shutdown expected to last up to the middle of November because of feedstock propylene shortages, according to market sources.
Argus assessed duty-free PP raffia prices at $1,400-1,410/t cfr southeast Asia on 5 November, unchanged on the week.
