Skip to content

Filter Options
Text :
Search Criteria :
Territory/Country :
Product Group/Product :
News Type :
My Favorites:
 

PP raffia downtrend shows no signs of easing in Vietnam

by Abdul Hadhi - ahadhi@chemorbis.com
  • 26/11/2019 (09:12)
Pressured by increasing supply of multiple origins, import PP raffia prices in Vietnam have sunk to their lowest since May 2016, data from ChemOrbis Price Index suggest.

Two weeks ago, import prices broke below the $1000/ton threshold for the first time since October 2016. Cargoes for several origins including India, China, Russia and Saudi Arabia have recently been offered at around $960-990/ton CIF Vietnam, cash.

The downward pressure shows no signs of abating with buyers heard to be bidding as low as $950/ton for Middle-East origin material.

Local market continues to track imports lower

Domestic prices have also followed a similar trend.

The weekly average of homo-PP raffia prices on FD Vietnam basis has hit a three-year low recently, according to ChemOrbis Price Index.

“High supplies and lukewarm demand combined with lower import prices are weighing on the country’s local PP market,” a trader noted.

Nearing Chinese New Year deters buyers

“The market is very bad. The closer we are to Chinese New Year, the weaker demand becomes,” a Vietnamese end product maker said. With import prices falling so quickly, he prefers not to buy cargoes from overseas to avoid being stuck with high inventory.

Chinese New Year, or Tet in Vietnamese, stretches from January 24 to January 30 in Vietnam. Market players traditionally tend to avoid booking cargoes for arrival near that period as business tends to slow during the period.

“We still have a lot of materials in the warehouse and there are more on the way. We haven’t bought much since September and up till now, we still can’t clear the stocks,” a local trader lamented.

Supply increases in both import and local markets

Although market players are unwilling to take on more stocks, supply from the overseas has been driving the already-high inventories further. “Overseas suppliers are pressured by having to clear their stocks before closing their books for the year. At this time of the year, they might be willing to give even bigger discounts to avoid getting caught with high stocks going into next year,” a regional trader explained.

Adding to the foreign supply will be the resumption of domestic supply. Nghi Son Refinery and Petrochemical’s 400,000 tons/year PP plant is due to restart soon after maintenance stretching from October.

Hyosung is also due to the start up its 300,000 tons/year PP plant in Vietnam in the fourth quarter, potentially adding to the local supply.

China’s homo-PP market already near $900 threshold

China, which typically influences the trend in Southeast Asia, also saw a continued downtrend in its homo-PP market.

Indian-origin offers in China have recently neared the $900/ton CIF threshold, a level last seen in June 2016.
Free Trial
Member Login