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The Vietnamese Dong joins other emerging currencies in the latest trail of depreciation against the US dollar, losing approximate 1.04 per cent over the spread of 30 days, based on the exchange rate at VietcomBank. Theoretically, a weakened local currency would be translated into higher domestic prices for imported goods using US dollar. However, this is not the case for the PP and PE market in Vietnam.

On an average, domestic homo-PP prices in Vietnam plunged VND400,000/ton ($17/ton) within this week, sending the latest prices to the range VND33,000,000-33,400,000/ton ($1300-1315/ton without VAT) including VAT, FD Vietnam, cash equivalent on the final trading day of the week. 

Meanwhile, locally held LLDPE film is traded at VND29,800,000-30,500,000/ton ($1173-1201/ton without VAT) and HDPE film at VND34,200,000-34,800,000/ton ($1347-1370/ton without VAT) with the same term.

Explaining the situation, several sources are pointing to the persistently weak demand amid the traditional off-peak season, while falling international market is putting tremendous pressure on local traders.

“Purchasing interest is very weak and converters only make small inquiries to maintain the payment term. Fear of the escalated trade war between China and the USA is too strong and we are not confident about the near-term outlook,” a trader said.

Meanwhile, domestic traders are also cautious about replenishing new import cargoes given the double-loses they face in the local ground now. “The market is racing lower, especially for homo-PP as Nghi Son Refinery and Petrochemical has achieved stable run rate, which means more quantity would arrive market in the coming week. Compared to earlier this month, the producer’s offers have fallen about VND300,000-400,000/ton ($13-17/ton),” another market source informed. 

Many other traders were hoping to hold HDPE film prices stable but failed to do so now that import market is sliding. “Most of our cargoes were purchased at previous high prices and we have to slash selling offers to match the current market condition. We hope demand could pick up soon, in the meantime, we prefer to wait for import HDPE film to reach the $1300/ton mark,” a trade source added.