Chinese sellers divert PP, PE cargoes to Vietnam due to tepid demand
In China, demand has been lukewarm since the end of the Chinese New Year holiday while two major local producers’ overall PP and PE inventories have remained high despite a slight reduction seen this week. “Buyers are showing resistance towards the current offer levels while some converters linger in their holiday mood since end product demand is not encouraging,” sellers said.
In Vietnam, on the other hand, PP and PE prices have extended their firming trend into the post-holiday period on the back of ongoing supply issues across Southeast Asia as well as the maintenance shutdowns in the Middle East. Several regional and overseas producers approached Vietnam with notable hikes for March, which also supported the firm sentiment.
A trader in Vietnam received offers for re-exported Saudi LDPE and LLDPE from China, commenting, “Offers we received from Chinese traders are more attractive when compared to local distributors’ price levels, which may exert some pressure on sellers in Vietnam. We think that LDPE and LLDPE prices might see a downward correction this month and move back down to the pre-Chinese New Year holiday levels. As for HDPE, the ongoing tightness continues to support a firm outlook.”
Another trader reported that the number of homo-PP offers they received from China has increased this week. “PP offers from China are offering a more competitive edge than Saudi origins. The prevailing price levels are quite high while the market is calm. Therefore, we think that prices may start to face a softening soon,” he opined.
A Vietnamese converter noted, “We received more PP and PE offers from China this week. Given the softening trend in their local markets, Chinese traders have diverted their allocations to Vietnam.”
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