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Vietnam’s polymer markets buckle under an influx of Chinese cargoes

by Merve Sezgün -
  • 26/05/2023 (02:12)
The polymer markets in Vietnam have been under heavy pressure due to a flood of PP, PE, PVC, PET and PS cargoes offered from China at competitive levels. A lack of a meaningful recovery in domestic demand has led to Chinese polymer suppliers to direct their cargoes to export markets, particularly to Vietnam as the closest outlet.

A recent market talk that China is witnessing a rise in Covid cases has also risen concerns about the long-heralded demand recovery in the country, as a new wave of infections across China would mean more bearishness not only in Vietnam but also in all ASEAN countries.

PP: Chinese origin raffia touches $900 CIF Vietnam

The low end of the import homo-PP raffia range in Vietnam has been down to the $900/ton threshold this week, dragged lower by competitive offers from China.

Several converters reported that they received Chinese homo-PP raffia offers at $920-930/ton CIF, cash, around $40/ton lower than last week, while some deals were sealed at $900/ton CIF for the origin, deepening the slide.

Low-priced Chinese offers have put pressure on other origins, with Indian homo-PP raffia offered at $920/ton CIF in the latter part of the week. “Suppliers of Middle Eastern origins struggle to compete, as their offers are almost $100/ton higher than that of Chinese sellers. They may soon revise their prices as well,” a buyer commented.

PE: Re-export Saudi offers keep the pressure on low ends

In Vietnam’s import PE markets, the number of re-export offers from China has increased notably this week. Saudi origin shipments diverted from the country to Vietnam have been offered at $970/ton CIF for LDPE film, $980/ton for LLDPE film, and $1000/ton for HDPE film, all forming the low ends of the market.

Such low levels indicated weekly decreases of around $10-30/ton, while expectations of further drops have kept buyers on the sidelines.

A Vietnamese trader said, “LDPE and LLDPE offers are now mostly below the $1000/ton CIF threshold given a flood of re-export shipments from China. For LDPE, deals even for ASEAN origins have been concluded at around $980/ton CIF. Demand is quite weak, since most players are on their toes amid the high possibility of further price erosion.”

PVC: India’s possible curb on Chinese imports exacerbates pressure on Vietnam

Lower Chinese origin offers have continued to form the low ends of Vietnam’s import PVC market this week, with players noting that suppliers of the origin have been more aggressive lately. Ethylene-based K67 offers from China currently stand at $750-760/ton CIF Vietnam, $30-50/ton below other origins.

Players expect that Chinese supply in Southeast Asia will increase further given India’s move to impose quantitative restrictions (QRs) on imports of PVC with a residual VCM content of more than 2ppm. Excess Chinese supply to be diverted to the region, coupled with weak demand conditions keep the Vietnamese PVC market under pressure.

PET: Sellers struggle to compete with Chinese offers

Aggressive offers for the Chinese origin have also been a hot topic in Vietnam’s PET bottle markets in recent weeks. The overall range for import prices has been assessed for the current week at $930-1030/ton CIF, cash, with the low end formed by Chinese offers standing notably below the offers for other origins.

“We continue to cut our offers due to the downtrend in feedstocks and tepid demand as well as low-priced cargoes from China. Despite our lower pricing, it’s a challenge to compete with them in both export and local markets,” said a source at a Thai producer.

PS: Chinese offers continue to press low ends

As for PS, the scene has been similar to other polymers in recent weeks, with aggressive Chinese offers weighing on Vietnam’s import GPPS and HIPS markets which have both reached the lowest levels since October 2020.

“A flow of competitive offers for duty-free Chinese materials has found its way to Southeast Asia, particularly to Vietnam, dragging down the low ends of the price ranges. The weakness in regional demand persists and suppliers of other origins of PS cannot compete,” explained a buyer.
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