Re-export PP flow from China saturates the Vietnamese market
According to traders, PP demand in Vietnam has faded away amidst oversupply concerns while the recent cautious recovery in China’s local PP market might encourage some sellers to cease their re-exporting activities.
The Vietnamese market had been an attractive destination for the re-export of homo-PP from China since the end of the Chinese New Year holidays as falling local prices in China started to push sellers to look for other outlets where they could achieve better netbacks. The firming trend in Vietnam remained in place for more than one month before the market shifted direction last week.
Data from ChemOrbis Price Index reveals that CFR Vietnam based homo-PP raffia prices on a weekly average basis retreated by around $75/ton in the last two weeks.
Source: ChemOrbis Price Wizard
An international trader commented, “Buyers in Southeast Asia are mostly adopting a wait and see attitude nowadays since they believe that the market might face downward pressure from the recent flow of re-export PP from China. We heard that the number of re-exporters is decreasing in line with the recent improvement in China’s local market.”
Given the fact that China’s local market is showing signs of recovery, and the Vietnamese market, which is flooded with re-exports from China, is no longer offering better netbacks for Chinese sellers in line with the retreating PP prices, this re-export flow to Vietnam is about to come to a halt, according to some players.
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