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As the Organization of the Petroleum Exporting Countries reached a deal to curtail production output by 1.2 million barrel on 30 November 2016, international oil prices soar nearly 10% on a single trading day and send positive signal to the Southeast Asian polyolefin market.

In fact, Vietnamese players reported seeing better number of purchase inquiries in local market, yet all attempts to increase prices yield fruitless result. A trader said, “We tried to increase our offers by VND100,000-200,000/ton ($4-9/ton) yet our customers insist to make purchases at the previous levels. Despite the surging energy market, we are not confident about the near term outlook; hence we plan to deplete remaining cargoes before the holiday season started.”

Another trader added, “Local prices are stagnant even wit the depreciation of the Vietnamese dong. Customers started to send in inquiries, but insist on previous price levels. Most of our cargoes generated very thin profit margins. Therefore, we prefer to hold cautious stance.”

Indonesia market meanwhile remains much calmer after the oil deal and players are pointing to the unsupportive demand condition, which might hurdle any of supplier’s effort to hold firm on prices. A converter said, “We are not in rush to take fresh stock. We think that market is too weak to support any price increment despite the firming energy values.” However, couple of international suppliers claimed to have concluded moderate number of deals for Middle Eastern homo-PP at $1000-1030/ton in Indonesia based on CIF term.

Looking ahead, players are holding bearish expectation pointing to the current cash crunch in India, which might force regular suppliers to divert their cargoes to other markets. Besides, the peak seasonal demand in Philippines is waning ahead of the holiday’s season, and this has underlined the challenges suppliers might face in achieving higher prices in the near term.