COVID-19 resurgence weighs on polymer sentiment in Vietnam
Fears over fresh lockdowns limit trading activities
Vietnam is back on high alert after fresh cases were confirmed over the weekend in the country’s third-largest city Danang. Starting from July 28, all flights in and out of Danang were suspended for 15 days. Social distancing rules have started to be re-imposed and all non-essential services have been closed.
Although authorities said that it was not a total lockdown of the city, fears over fresh lockdowns have kept most polymer players on the sidelines so far, and purchasing activity has declined.
Buyers’ resistance gives way to silence in PP, PE markets
Import PP and PE prices in Vietnam had tracked a mostly firming trend since around late April. This week, the uptrend has faltered as buyers’ intense resistance to successive price hikes has given way to silence amid the COVID-19 resurgence.
According to data from ChemOrbis Price Index, polyolefin prices on CIF Vietnam basis have already regained what they had lost during the period that the pandemic hit the markets.
“From the beginning of the upward trend, buyers in Vietnam had been resisting rising offers, lamenting that they were unable to pass on the steady climb in polymer prices to their end-users. This week, they are not even in the market or placing counter bids. Demand has evaporated amid second-wave fears,” a few sellers explained.
A PE converter noted, “We are not planning to make any fresh purchases at this moment as we are worried about the resurgence of the virus which might prompt new lockdowns soon.”
Local PVC buyers reluctant to accept higher Aug offers
In the country’s PVC market, a domestic producer announced August PVC offers with increases from July, following the footsteps of a major Taiwanese producer who applied $20/ton hikes on its new offers to Asian markets two weeks ago.
The Vietnamese producer lifted its local PVC K67 prices by VND700,000-1,300,000/ton ($30-56/ton).
A source from the producer commented, “Buyers are reluctant to accept our new price levels as they are deemed too high. Demand in the domestic market is weak due to the rainy season and fears over a second-wave of COVID-19 infections. Therefore, we think the uptrend is unlikely to continue in the near term.”
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