In the context of political and economic uncertainties, the current demand for polyolefin in Pakistan remains sluggish and may remain so throughout the August. The recent weakness of the Pakistani rupee against the dollar has seriously affected buyers ' interest in the market, and the reaction to the August-delivered polyethylene (PE) and polypropylene (PP) offers has been lukewarm. The Pakistani rupee has fallen by about 10% per cent against the dollar in the past two months, and buyers have suffered heavy losses in their purchases.
Although PE and PP quotations are generally low at the present stage, the high volatility of exchange rates has led most importers to take a wait-and-see attitude. The price of linear low-density polyethylene (LLDPE) delivered by India and the Gulf Cooperation Council (GCC) in August was 1105~1150 USD/ton (CFR, Pakistan), which dropped 20~30 USD/ton compared to the previous week. Recent weakness in China and other parts of Asia has prompted sellers to lower prices, Especially in the case of adequate supply.
In addition, drawing-grade and injection-grade PP from the GCC region are quoted as 1250~1260 USD/ton, which has fallen 40~60 USD/ton since the beginning of July, mainly affected by the low PP price in Asia market and the general pessimism. Market sources said the August late Mecca pilgrimage and Eid al-Fitr holiday had limited the August interest in buying.
An importer also said that the Eid al-Fitr and Mecca pilgrimage could lead to a decrease in production and trading activity in related industries, thereby reducing the demand for PE and pp. Market participants await a clearer political situation in Pakistan, as the newly elected Imland Khan will officially become prime Minister of Pakistan later this month.
Market sources say that, in addition to the devaluation of the Pakistani rupee, the depletion of foreign reserves in the overall economic uncertainty casts a shadow over general trade. At present, most of the domestic PE and PP varieties inventory is abundant, especially in the uncertain macroeconomic environment, local procurement interest has declined.
NCR statistics show that July 27 when the Pakistani domestic LLDPE price of 1135~1170 USD/ton, down 5 USD/ton in the previous week. Drawing grade and injection grade PP price is 1250~1280 USD/ton, down 20 USD/ton compared to the previous week. Pakistan PE and PP demand slump