Vietnamese local PP and PE markets soften on poor demand

Local PP and PE prices in Vietnam, after rallying for 10 weeks till immediately after the Lunar New Year holidays in end-January, have since been dampened by a persistent lack of support from end-user buyers. Traders do not expect to see a revival in the near term as demand has shown no signs of picking up.

Buyers have held back because of the lack of demand from downstream markets, even though increasing feedstock costs have exerted upward pressure on producers.

Local PE and PP prices decline after holidays

The said period till end-January saw PE film local prices rising by 11-13%, following which the local markets saw a slide of up to 1% for HDPE and LLDPE and a 4% decrease for LDPE. As for PP, domestic prices rose by about 22% in the period till the end of the holidays, after which they fell by about 3%.



LDPE local prices in Vietnam, which were noted as high as VND32,000,000/ton ($1241/ton) in end-January have seen offers at VND30,000,000-31,000,000/ton ($1153-1190/ton) in the current week. LLDPE prices were VND500,000-1,000,000/ton ($21-42/ton) lower from last week, trading mostly in a VND28,000,000-28,500,000/ton ($1076-1105/ton) range, while HDPE prices were assessed in a VND28,000,000-29,000,000/ton ($1076-1116/ton) range, mostly stable week over week.

PPH raffia prices, meanwhile, have also seen a softening trend, with the prices currently at VND28,000,000-28,500,000/ton ($1076-1095/ton), down VND500,000/ton ($21/ton) from a week earlier.

Current offers ‘too high’, say traders

Although the availability remained slightly crimped, most players agreed that the current offers were slightly high for the market to accept. A trader based in Ho Chi Minh city said supply was somewhat tight but there’s no demand to support current prices. “We don’t see any uptrend being sustained for the near term. We’ll continue to buy only for immediate requirements as demand is too weak,” he added.

Buyers seek material just for immediate requirements

Another trader based in the same city concurred. “Converters are buying less and the buying is mostly on a need-to basis. End-product demand has dropped a lot, so nobody seems to be in a mood to replenish stocks. Even as a trader, we have high inventories as the demand stays weak, so we remain on the sidelines. We’ll buy when there are pre-orders from customers,” he said.

In fact, the buying sentiment has remained weak since the end of the Lunar New Year holidays in late January. “We think prices may soon lose some strength. Since the holidays, buyers have mostly been sitting tight, or buying just for immediate requirements. It has become too hard to sell at the high end. If Chinese demand also falters, we may see Southeast Asian prices continuing to slide,” a Hanoi-based trader added.

Prices softening despite higher feedstock costs

The softening of polyolefin prices in Vietnam has happened despite rising feedstock costs. Ethylene prices have surged by about 22% since mid-January to $950/ton CFR China, while propylene prices have risen by about 12% to $1000/ton CFR China, according to ChemOrbis Price Wizard.