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22 Jun 2017

Industry

2017 Plastic Pellet Export Volume to CLMV May Grow 4-9%, Largely to Myanmar (Current Issue No. 2851)

 We at KResearch project that Thailand's plastic pellet exports overall will advance almost on a par with that reported for 2016 at some 5.9 million tons in 2017, equivalent to USD7.95-8.15 billion in value, increasing 3.2-5.8 percent, buoyed by rising plastic pellet prices in line with global crude oil, based on an assumption that Dubai crude averages USD47-49/barrel during 2H17 – down from the average of USD51/barrel during 1H17. However, if 2H17 Dubai crude prices fall below USD45/barrel, the value of Thai plastic pellet exports may grow less than 2.5 percent YoY in 2017.

Cambodia, Laos, Myanmar and Vietnam (CLMV) are promising export destinations for Thai plastic pellets. KResearch is of the view that the shipment volume of Thai plastic pellets to the CLMV may expand 4-9 percent YoY in 2017, which would be higher than Thailand's overall plastic pellet export growth rate. Such an uptick would likely be due to impressive CLMV economic performance spurring consumer spending, including on plastic products. Ongoing infrastructural development there – where their petrochemical industries remain in infancy – has helped bolster demand for plastic pellets, as well.

Since plastic pellets are classified as a commodity, export market competition is intense. CLMV currently import plastic pellets from Singapore, South Korea, Saudi Arabia, Taiwan and Thailand. Thai plastic pellet manufacturers may differentiate themselves by offering engineering plastic pellets in partnership with users to better meet their needs. They should maintain cordial relations with such customers in CLMV, because this would help open new business opportunities in those markets and ease the risk of being too dependent on the Chinese market for plastic pellet exports.

Industry