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Demand for import homo-PP in Vietnam has been sluggish over the past month as buyers were hoping for further price reduction amid weak upstream market and aggressive stance from Chinese suppliers. However, players started discussing about a possibility of stabilized PP market throughout July as Middle Eastern sellers remains inactive in offering.

Several Saudi Arabia makers decided to divert their cargoes to other markets in recent weeks, in bid to obtain healthier margins, causing concern among Vietnamese buyers. An international trader informed, “We only have a small quantity of Saudi homo-PP injection to offer at $1040-1050/ton CIF Vietnam this week; yarn grade has been sold all to India.” Another trader selling same cargoes also claimed to have no quantity to offer to Vietnam this week.

Earlier this week, a Saudi Arabia producer decided to divert their cargoes to South Africa, Turkey and India as Southeast Asian buyers are placing bids are well below offer levels, “Demand in India is diminishing because of the implementation of the GST, however, due to tight supply stemming from a shutdown at one of the major local producer, buyers here are still accepting higher prices.” In fact, Indian buyers informed that import dutiable cargoes could fetch prices in the range $1090-1100/ton CIF India, LC 0-90 days term.

In addition, Chinese suppliers are also taking firmer stance on their cargoes claiming tightening supply. A Vietnamese converter received offer for regular Chinese homo-PP yarn at $1060/ton CIF said, “Our supplier refuse to negotiate any further and we are considering whether to proceed with purchases.” As reported earlier, several PP plants in China have either reduce operating rate due to lack of propylene or switch to make PP copolymers since mid June. This has resulted in a more balanced homo-PP yarn supply in local China market, reducing the urge to push for export.

As a result, Vietnamese players are expecting import PP market to follow stable trend throughout July on the back of tightening supply. “Prices might only witness small fluctuation since downstream market is still in mid of off-peak season,” a buyer added.