Hong Kong (Platts)--11Apr2011/633 am EDT/1033 GMT
Global demand for long steel products is expected to remain weak in the short term, a number of sources said on the the sidelines of the SteelOrbis/IREPAS 2011 conference in Hong Kong.
A downward price trend was expected to continue at least until June as everyone trading steel was buying hand-to-mouth, with no opportunities to do back-to-back positions.
The political unrest across the Middle East has had a large impact on Turkish rebar and billet demand as well as spot pricing because a large proportion of Turkish rebar exports go to the Middle East.
Scrap rebar and billet prices in the Middle East have fallen in recent weeks, pushing down export prices in Turkey. Turkish rebar can be purchased now as low as $650/mt FOB Turkey, a number of sources said at the conference. Rebar prices out of Turkey have dropped $22.50/mt in the last month, according to Platts data.
Friday, April 15, 2011
Palm Oil Prices
Palm oil dropped for a third day, the worst losing run this month, on speculation increased output from Indonesia and Malaysia, the top growers, will boost supply.
The June-delivery contract lost 2 percent to 3,282 ringgit ($1,084) per metric ton, the most since March 22. The commodity fell 0.7 percent yesterday and 1.3 percent on April 12.
Futures have lost 17 percent since reaching a 35-month high of 3,967 ringgit Feb. 10 as a fading La Nina improved the outlook for production. The phenomenon caused excessive rain in parts of Southeast Asia, disrupting harvesting and affected yields. Global palm oil output this year will be at least 3 million tons higher than 2010, Dorab Mistry, director of Godrej International Ltd., said April 12.
“Palm oil supply pressure is there in the market,” Chandran Sinnasamy, head of trading at LT International Futures (M) Sdn, said by phone in Kuala Lumpur. “If there are no weather issues and no further cuts in soybean acreage, I think palm oil prices will follow supply pressure.”
La Nina will start to weaken in the equatorial Pacific in April, normalizing weather in Malaysia and bringing levels of rain that should favor oil palms, the country’s Meteorological Department said in an e-mailed report yesterday.
The June-delivery contract lost 2 percent to 3,282 ringgit ($1,084) per metric ton, the most since March 22. The commodity fell 0.7 percent yesterday and 1.3 percent on April 12.
Futures have lost 17 percent since reaching a 35-month high of 3,967 ringgit Feb. 10 as a fading La Nina improved the outlook for production. The phenomenon caused excessive rain in parts of Southeast Asia, disrupting harvesting and affected yields. Global palm oil output this year will be at least 3 million tons higher than 2010, Dorab Mistry, director of Godrej International Ltd., said April 12.
“Palm oil supply pressure is there in the market,” Chandran Sinnasamy, head of trading at LT International Futures (M) Sdn, said by phone in Kuala Lumpur. “If there are no weather issues and no further cuts in soybean acreage, I think palm oil prices will follow supply pressure.”
La Nina will start to weaken in the equatorial Pacific in April, normalizing weather in Malaysia and bringing levels of rain that should favor oil palms, the country’s Meteorological Department said in an e-mailed report yesterday.
PP tight supply
Players in Asia’s PVC markets are preparing for another month of steep increases in PVC and VCM prices, with a South Korean producer quotes higher May import offers to China, as per Chemorbis. Persistently limited VCM avails along with higher costs were cited as the main reasons for the ongoing increases in PVC prices. Spot VCM deals for April were concluded towards the end of March with increases of US$60/ton from March done deal levels. As VCM availability from Japan, Asia’s largest VCM producer, remains limited and upstream energy costs have been gaining over the past two weeks, most players expect to see higher initial May offers for VCM, although no clear sell ideas have been reported as of yet. Upstream, crude oil futures on the NYMEX have gained nearly US$5/barrel from the start of the month to surpass the US$112/barrel threshold while spot naphtha prices on a CFR Japan basis are up more than US$50/ton since the start of the month. Both crude oil and naphtha prices are currently trading at their highest levels since the summer of 2008.
In China, a South Korean producer pioneered May PVC price hikes at the start of the week by announcing May prices with increases of US$80-90/ton from April done deal levels. Players had been expecting additional increases on May offers from mainstream Asian producers, although the initial May offers from the Korean producer were well above market expectations of US$20-50/ton increases expressed last week. Import PVC prices in China have a cumulative addition of US$220-260/ton over the past four months, with more than half of the total increase amount coming in April and May. In addition to higher upstream costs and reduced availability of Japanese cargoes, players commented that PVC demand has been picking up inside China recently, with several converters reportedly raising operating rates in response to stronger demand for their end products.
In China, a South Korean producer pioneered May PVC price hikes at the start of the week by announcing May prices with increases of US$80-90/ton from April done deal levels. Players had been expecting additional increases on May offers from mainstream Asian producers, although the initial May offers from the Korean producer were well above market expectations of US$20-50/ton increases expressed last week. Import PVC prices in China have a cumulative addition of US$220-260/ton over the past four months, with more than half of the total increase amount coming in April and May. In addition to higher upstream costs and reduced availability of Japanese cargoes, players commented that PVC demand has been picking up inside China recently, with several converters reportedly raising operating rates in response to stronger demand for their end products.
May 2011 PVC prices
Players in Asia’s PVC markets are preparing for another month of steep increases in PVC and VCM prices, with a South Korean producer quotes higher May import offers to China, as per Chemorbis. Persistently limited VCM avails along with higher costs were cited as the main reasons for the ongoing increases in PVC prices. Spot VCM deals for April were concluded towards the end of March with increases of US$60/ton from March done deal levels. As VCM availability from Japan, Asia’s largest VCM producer, remains limited and upstream energy costs have been gaining over the past two weeks, most players expect to see higher initial May offers for VCM, although no clear sell ideas have been reported as of yet. Upstream, crude oil futures on the NYMEX have gained nearly US$5/barrel from the start of the month to surpass the US$112/barrel threshold while spot naphtha prices on a CFR Japan basis are up more than US$50/ton since the start of the month. Both crude oil and naphtha prices are currently trading at their highest levels since the summer of 2008.
In China, a South Korean producer pioneered May PVC price hikes at the start of the week by announcing May prices with increases of US$80-90/ton from April done deal levels. Players had been expecting additional increases on May offers from mainstream Asian producers, although the initial May offers from the Korean producer were well above market expectations of US$20-50/ton increases expressed last week. Import PVC prices in China have a cumulative addition of US$220-260/ton over the past four months, with more than half of the total increase amount coming in April and May. In addition to higher upstream costs and reduced availability of Japanese cargoes, players commented that PVC demand has been picking up inside China recently, with several converters reportedly raising operating rates in response to stronger demand for their end products.
In China, a South Korean producer pioneered May PVC price hikes at the start of the week by announcing May prices with increases of US$80-90/ton from April done deal levels. Players had been expecting additional increases on May offers from mainstream Asian producers, although the initial May offers from the Korean producer were well above market expectations of US$20-50/ton increases expressed last week. Import PVC prices in China have a cumulative addition of US$220-260/ton over the past four months, with more than half of the total increase amount coming in April and May. In addition to higher upstream costs and reduced availability of Japanese cargoes, players commented that PVC demand has been picking up inside China recently, with several converters reportedly raising operating rates in response to stronger demand for their end products.
LLDPE, HDPE film prices from Plastemart
In Asia, Polyethylene deals were reported with rollovers to decreases from producers’ initial offer levels as stronger upstream costs failed to generate sustainable increases in the region’s PE markets, as per Chemorbis. Weakness in PE markets is beginning to make itself felt on spot ethylene prices, which recorded some slight decreases on Thursday on a CFR Northeast Asia basis due to fears that ethylene availability will loosen in the region as PE producers are reported to be considering reducing operating rates in the face of their unviable production margins.
According to data from ChemOrbis Price Index, spot LDPE film prices on a CFR China basis are stable when compared with the same period from last month while HDPE film prices have gained US$30/ton and LLDPE film prices have lost US$10/ton on the high end while holding steady on the low end. During this same period, crude oil prices have gained more than US$6/barrel, spot naphtha prices on a CFR Japan basis have jumped US$70/ton and spot ethylene prices on a CFR Northeast Asia basis have risen nearly US$60/ton. This has left all overseas producers offering HDPE and LLDPE film operating well below their theoretical production costs while the lower ends of the HDPE and LLDPE film ranges are scarcely at par with spot ethylene prices. Even with spot PE prices failing to move higher with costs, PE producers have so far been unable to push through any real increases on their deal prices. A major global producer announced their May prices this week with decreases of US$40/ton for Singaporean LLDPE film and rollovers for Middle Eastern HDPE film.
PE sellers in Southeast Asia have also been forced to concede to lower prices on their deal prices as buyers in the region have been unwilling to purchase beyond their needs for the past several weeks due to the ongoing lack of a clear picture regarding the market direction. A major Middle Eastern producer announced their April prices to Malaysia this week with decreases of US$10-20/ton for HDPE film and US$20/ton for LLDPE film when compared with their most recent March price levels. A Southeast Asian producer reported that they managed to conclude a small number of HDPE film deals this week after agreeing to reductions of $10-20/ton from their initial offer levels. Inside Indonesia, a converter reported that they secured some domestic HDPE film at prices US$55/ton below the prevailing producer price level, while distributors in Malaysia reported that they are considering giving some discounts to customers willing to make purchases in the face of persistently stagnant demand.
According to data from ChemOrbis Price Index, spot LDPE film prices on a CFR China basis are stable when compared with the same period from last month while HDPE film prices have gained US$30/ton and LLDPE film prices have lost US$10/ton on the high end while holding steady on the low end. During this same period, crude oil prices have gained more than US$6/barrel, spot naphtha prices on a CFR Japan basis have jumped US$70/ton and spot ethylene prices on a CFR Northeast Asia basis have risen nearly US$60/ton. This has left all overseas producers offering HDPE and LLDPE film operating well below their theoretical production costs while the lower ends of the HDPE and LLDPE film ranges are scarcely at par with spot ethylene prices. Even with spot PE prices failing to move higher with costs, PE producers have so far been unable to push through any real increases on their deal prices. A major global producer announced their May prices this week with decreases of US$40/ton for Singaporean LLDPE film and rollovers for Middle Eastern HDPE film.
PE sellers in Southeast Asia have also been forced to concede to lower prices on their deal prices as buyers in the region have been unwilling to purchase beyond their needs for the past several weeks due to the ongoing lack of a clear picture regarding the market direction. A major Middle Eastern producer announced their April prices to Malaysia this week with decreases of US$10-20/ton for HDPE film and US$20/ton for LLDPE film when compared with their most recent March price levels. A Southeast Asian producer reported that they managed to conclude a small number of HDPE film deals this week after agreeing to reductions of $10-20/ton from their initial offer levels. Inside Indonesia, a converter reported that they secured some domestic HDPE film at prices US$55/ton below the prevailing producer price level, while distributors in Malaysia reported that they are considering giving some discounts to customers willing to make purchases in the face of persistently stagnant demand.
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