Chinese homo-PP offers to Vietnam surge on higher freights

Players in Vietnam’s PP markets reported that homo-PP offers from China saw sharp increases this week on the back of surging freight costs from the country. The latest upturn in China’s domestic market also encouraged sellers to raise their export offers to Vietnam and elsewhere, a few traders commented.

Chinese PP loses competitive edge upon latest hikes

Over the past few months, Chinese homo-PP cargoes were competitively priced, standing well below other mainstream origins in Vietnam. Upon the latest hikes, however, Chinese PP appears to have lost its competitive edge.

A PP woven bag manufacturer based in Vietnam said that he received PPH raffia offers from China this week at $1050/ton CIF, cash. “Chinese homo-PP offers are around $30-50/ton higher than last week, while offers from South Korea are mostly stable at $1020-1030/ton CIF, cash. Rising local prices inside China, coupled with the surge in freight rates have paved the way for this week’s increases. However, we still prefer to buy from the local market which continues to offer more attractive levels,” he noted.

Last week, in Vietnam, Chinese homo-PP raffia offers were available for as low as $950/ton CIF, cash.

Sellers in China point to rising futures markets

PP sellers in China have increased their export offers this week, attributing the hike to rising domestic prices amid stronger futures on the Dalian Commodity Exchange.

“We have lifted our export homo-PP raffia offers by $30/ton due to the sharp rise in futures prices driven by recent positive macroeconomic developments and new policies announced by the government. We may consider applying further hikes before the end of the week, as local prices continue to increase,” a trader based in Shanghai commented.