PP, PE sellers lift offers to Vietnam despite pre-holiday lull
When compared to last week, homo-PP, LDPE and LLDPE prices on CIF Vietnam basis climbed $10-20/ton while the local markets were also up by around VND500,000/ton ($21/ton). HDPE prices, meanwhile, were largely stable week over week.
Supply from Mid-East expected to decline
Sellers who approached the Vietnamese market with firmer offers pointed to limited allocations from the Middle East ahead of plant shutdowns scheduled for the first quarter.
A source at a Middle Eastern producer noted, “We raised our LLDPE and LDPE film offers to Vietnam given our reduced allocations. We will wait to see buyers’ response as demand is currently not that bright due to the upcoming holiday. HDPE prices, meanwhile, may remain under pressure from ample supplies and weak demand over the near term.”
Both buyers and sellers reported that offers for Middle Eastern homo-PP also saw some fresh gains due to lower supplies. “Saudi raffia prices have moved higher to hit the $1000/ton CIF Vietnam threshold this week,” a converter said.
Reduced number of US PE offers
In addition to supply limitations from the Middle East, a few traders based in Vietnam also reported that the number of LLDPE and LDPE offers from the US has decreased recently.
“Our offers for US LLDPE are up by $20/ton from last week as supply is not ample, unlike the previous year. Plus, demand is not bad,” a seller said.
Upcoming holiday casting a shadow over sentiment
Market activity is unlikely to rise significantly heading into the Lunar New Year holiday in late January as Vietnamese players will be away from their desks for one week due to new year celebrations.
“Buyers’ enthusiasm for procurement is limited as they are waiting for promotions before Chinese New Year. Some traders who need cash may release stock with discounts,” a Vietnamese trader opined.
Support from crude oil proves short-lived
Crude oil futures spiked on Monday on news of the US airstrike in Iraq and again on Wednesday when Iran retaliated by targeting two air bases in Iraq hosting US troops, boosting confidence in the petrochemical markets. However, oil prices cancelled their earlier gains on easing tensions later on Wednesday.
A converter in Vietnam commented, “The recent gains in PP prices are sure to be not driven by demand as buyers avoid buying beyond their urgent needs given the approaching holiday. Sellers gathered confidence when oil futures surged early in the week, yet the crude spike has proved short-lived.”
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