Asia, Middle East petrochemical trading to weaken on lower demand in Ramadan

Petrochemical trading in the Middle East and Asia is expected to slow down during the month of Ramadan, hurt by lower demand and production, as well as reduced working hours, ICIS reported, citing unnamed industry sources.

Buyers in Southeast Asia are adopting a wait-and-see policy as further price declines are forecasted during the Islamic holy month. Demand is seen subdued while production has been kept normal so far in Asia and the Middle East.

As for polyolefins, polyethylene (PE) purchases of converting firms from the Middle East have been hurt, due to expected shipment delays in Ramadan.

PE cargoes that could not be sold in China are also expected to be directed to Southeast Asia, they added.

Buying activity and production of polyester may retreat during the same period. The market is currently witnessing weak polyester purchases, despite significant price cuts made a few weeks ago.

Demand for polyvinyl chloride (PVC) will likely weaken due to slowed construction activities in the Middle East.

Meanwhile, demand for PVC had been stronger in the previous weeks as importers sought to book volumes ahead of Ramadan. Restocking activities are expected to be completed soon, the sources added.

Demand for polystyrene (PS) typically rose ahead of Ramadan from the downstream food container sector, the biggest end-market for the material in the Middle East.

Factories in Southeast Asia will scale down production of polymethyl methacrylate (PMMA) in Ramadan, but no impact is seen on prices.

PMMA prices in the region have been decreasing on the low cost of feedstock methyl methacrylate (MMA) and softened import demand from the key China market amid a supply glut.