Vietnam PP, PE sellers see glimmers of hope from China’s Covid pivot, but will demand return?
ChemOrbis Price Index data suggest that both PP and PE prices on FD/CIF Vietnam basis have been hovering around their lowest levels in more than two years, despite the recent uptick. Overall polyolefin demand in the country has been persistently weak in the midst of a slowing economy as well as a sluggish China market..
China is easing its zero-case policy, can it be a saving grace for PP, PE in Vietnam?
A stagnant China market has not been good news for the global polyolefin markets, and particularly for Vietnam, one of its closest neighbors. Falling prices amid a lack of buying activity in China, the world’s largest polyolefin buyer, have kept the Vietnamese PP and PE markets under pressure, dragging down prices as a result.
Hence either China’s opening up or easing its strict Covid measures is big news for players in Vietnam. As a knee-jerk reaction to the news, sellers in Vietnam have approached their customers with stable to higher offers this week.
A trader said, “We have raised our PP raffia offer for a Saudi origin slightly by $10/ton from two weeks ago to $960/ton CIF, cash. We are now waiting to receive bids from buyers.” Last week, a done deal for Saudi homo-PP raffia was reported at as low as $900/ton CIF, meanwhile.
Another trader reported that they kept their Saudi PE offers stable at $950/ton for LLDPE, $960/ton for HDPE, and $1050-1060/ton for LDPE film, all on CIF Vietnam, cash basis. “The market is being propped up by high upstream costs as well as the news that China is reopening,” he commented.
Sellers’ hopes of a strong rebound could be thwarted by demand
On one hand, PP and PE sellers have been encouraged enough to firm up their stance. On the other, converters in the country have been mostly silent, sticking to the sidelines amid reduced activities in their end sectors.
Several sellers reported that they were yet to receive any bids on their offers at the time of press.
“We could close a few deals last week, but we haven’t been able to conclude anything this week yet as converters stay away from the market despite the recent uptick in prices. We feel that prices will not go down this month, but it will be hard to see an upward price trend, too,” a trader commented.
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