cheaper plastic resin, higher demand for plastic products
Tek Seng Holdings Bhd and lp Resources Bhd expect resin prices to fall further this month.
Hang Seng executive chairman Loh benbeng said in an interview that PVC (PVC)
Resin prices are expected to fall to $1,100 per ton in July, compared with $1,350 per ton in the 5 quarter.
\"The drop is timely as orders for our PVC flooring products will come as the Harry Raya festival approaches.
\"We have about RM45mil orders on hand and will be delivered to domestic and foreign customers in Indonesia, Philippines, Middle East by SeptemberEast and Africa.
\"Our production of PVC flooring products is expected to grow by 15% from about 50,000 tons in 2010,\" Loh added . \".
Kelvin Hawa, managing director of Lp, said the price of polyethylene resin (PE)
Demand from China is expected to decline further this month as demand from China declines.
\"Resin prices should stabilize in the second half of the year, and then gradually increase as market forces increase.
\"Sales began to slow in April as resin prices are expected to fall.
\"As a result, orders were delayed by some customers.
Our sales of plastic packaging materials have picked up again due to incoming activities.
\"Now that the price of resin has fallen, our sales price will be adjusted accordingly and we expect more orders.
\"Our profit margins will not be affected because we have efficient production controls.
Khaw said: \"When lp buys raw materials in US dollars and sells products in US dollars, our profits are not affected compared to those that buy raw materials in ringgit and sell them in US dollars.
The price of PE resin hovers around $1,250 per ton, compared to $1,340 in June.
It was the highest point in the third quarter, reaching $1,500 a tonne.
Khaw said Japan is expected to start rebuilding the economy in the fourth quarter, which will increase demand for plastic packaging materials.
\"It is expected that the group\'s domestic contribution to revenue will reach 50% this year, while Japan will generate about 30% of its revenue.
\"Australia, New Zealand and the rest of the world have produced the rest,\" Khaw added . \".
In the first five months of 2011, the company\'s sales revenue was about 10,000 yuan, about tons of plastic packaging materials.
\"We will reach 30,000 tons at an annual output of 2011,\" he said . \".
At the same time, Japan\'s largest exporter of plastic packaging materials, Tongguan industry, is injecting RM25mil to install four production lines in 2011, from the current 11,000 tons per month to more than 10,000 tons per month.
This year, Thong Guan aims to produce more than 100,000 tons of plastic packaging materials, compared with 90,000 tons last year.
Huang poon Chuan, managing director of the group, said the expansion was to meet the group\'s demand for stretch film products and PVC food packaging.
\"We expect that some of our traditional markets in Australia will be consolidated due to a slowdown in economic expectations.
\"However, with the decline in the price of plastic resin, we expect that there will be more product orders in the new market we are entering in a diversified way.
\"We have received orders for plastic packaging materials worth more than 30 RMB from our customers,\" he said . \".