Russian and Chinese PPH cargoes find way to Turkey and Vietnam

PPH markets in Turkey and Vietnam are embracing imported cargoes from Russia and China at relatively competitive levels. Vietnam, in particular, has been under pressure from exports from China, where low netbacks and lockdowns push sellers to export more but logistics mishaps persist.

Russian cargoes sold with discounts in Turkey

Russian cargoes have been sold at relatively competitive levels in Turkey recently as sellers yielded to the unsatisfactory demand,enhanced by the Ramadan lull, macroeconomic pressures as well as volatile upstream markets.

Plus, European buyers shunned imports from Russia amid Western sanctions, which in turn seem to have left more Russian cargoes stranded. “If stocks accumulate in Russia, this may exert pressure on Turkey in the coming days,” opined a sack manufacturer.

Accordingly, prompt Russian cargoes from traders were sold at $1630-1650/ton for raffia and $1700/ton for fibre CIF Turkey, subject to 6.5% customs duty. In comparison, Saudi Arabian PP raffia and fibre were assessed stable to $20/ton lower at $1660-1700/ton and $1710-1750/ton with the same terms.

Chinese offers remain competitive, but see limited interest in Turkey

Likewise, Chinese offers for break-bulk shipments stood below mainstream origins. PPH raffia and fibre offers were offering a competitive edge at $1600/ton and $1650/ton CIF Turkey, subject to 6.5% customs duty, respectively. These offers stood $60/ton below the low end for Saudi Arabian origins and formed the low end for overall import ranges. As a side note, Chinese raffia offers below the $1600/ton CIF level were also heard in a few cases without confirmation.

Despite providing attractive levels, Chinese offers failed to grab much interest not only due to sluggish demand but also due to concerns over shipments. Extended lockdowns in China put further strain on logistics operations, resulting in long ship queues, trucker and container shortage.

Delivery times from China almost doubled

A trader said, “It takes 70 days now, instead of 40 days in the past to complete deliveries from China. Shipments also remain an issue as it depends on a variety of factors amid disrupted port operations. This may be causing buyers to shy away.”

Whether or not Chinese suppliers will boost exports to Turkey despite logistics mishaps will hinge on their domestic demand and the Covid outbreak.

Competition gets fierce in Vietnam

Russian and Chinese offers also remain a pressure point on Vietnam for more than a month. PP raffia and injection offers for these two origins were largely reported at $1320-1350/ton CIF last week, while Middle East offers were assessed at $1350-1400/ton and ASEAN origins at $1390-1420/ton, both on CIF SEA basis.

Players widely concur that availability is quite sufficient and Mideast and Northeast Asian origin material have to compete with “aggressive” Chinese and Russian offers. South Korean offers have also slumped in the past three weeks to near the low end of the overall range.

Vietnam is the primary home for Chinese PP exports

According to ChemOrbis Statistics, China exported more than 110,000 tons of PP in January-February this year, up 50% from the same period of last year. One fifth of China’s overall PP exports was addressed to Vietnam, which was also up 21% on year.

Vietnam’s top PP supplier, however, is South Korea, statistics suggest. China’s aggressive pricing has been denting overall buying ideas for other mainstream origins, as well.

Local market is cheaper than imports in Vietnam

Buyers receiving the Chinese and Russian offers at competitive prices still appear to be reluctant to rush for deals, since they find the local offers more preferable.

“Local prices in Vietnam are cheaper than the cost of import cargoes even for lower-priced Chinese cargoes. Plus, we do not want to secure imported cargoes as the shipments and transit times are still problematic for these origins,” a buyer commented.