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Vietnamese PE converters complain of surging raw material costs

by ChemOrbis Editorial Team -
  • 24/03/2016 (17:27)
According to PE converters’ reports, several manufacturers in Vietnam are voicing complaints about steadily escalating raw material costs, which are harming their profit margins. Buyers comment that they may begin to show greater resistance to higher raw material costs as they are already struggling to digest the surging raw material costs of the past few weeks.

A plastic bag manufacturer reported receiving offers for Saudi Arabian HDPE and LLDPE film at VND33,000,000/ton FD, cash inc VAT ($1366/ton without VAT). “We had last sourced some material shortly after the Chinese New Year holiday at VND28,000,000/ton ($1140/ton without VAT) and now we will need to purchase at much higher prices as we need to replenish. We are seeing good demand for our end products but we are now considering making some adjustments on our end product prices in consideration of higher raw material costs,” the buyer stated.

A converter in the packaging sector reported receiving offers for locally-held Saudi Arabian cargoes at VND32,000,000/ton ($1325/ton without VAT) for LLDPE film and at VND31,500,000/ton ($1304/ton without VAT) for HDPE film. “Demand for our end products is normal, but not quite as good as last year. We are struggling to cope with higher raw material costs but have not been able to raise our end product prices due to complaints from our customers,” the buyer stated. Another converter in the packaging sector complained, “We have had to raise our end product prices to cover the sharp rise in our raw material costs and many of our customers are showing resistance to higher prices.”

Locally-held import PE cargoes currently stand at VND31,000,000-31,500,000/ton ($1284-1304/ton without VAT) for LDPE film, at VND31,000,000-33,000,000/ton ($1284-1366/ton without VAT) for LLDPE film and at VND30,000,000-33,000,000/ton ($1242-1366/ton without VAT) for HDPE film, all on an FD Vietnam, cash equivalent basis inc VAT.
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