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In the course of eleven trading days, the Asian ethylene market has already shredded $200-210/ton to send prices to the lowest levels since September 2015. Ample supply as a result of heavy influx from Southeast Asian and Middle East is the main pressure point of the current downtrend.   

For one, the initial impression is that would this impact the downstream PE market? It usually does, however, not this time. 

Several overseas suppliers have either lifted import PE offers to Vietnam or planned to do so claiming lack of inventories pressure. In fact, a major Saudi Arabia producer introduces $20-30/ton hike on the latest offers to Vietnam, bringing price list to $1110/ton for HDPE film, $1060/ton for LLDPE film and $1050/ton for LDPE film, all based on CIF, LC AS term.

“We were informed that availability is limited. We have already purchased some quantities in the previous week and at the moment prefer to just wait and see,” a buyer reported. Last week this buyer purchased LLDPE film from the same maker at $1030/ton at the bonded warehouse in Vietnam.

In the meantime, another Saudi producer lifted LDPE film by $40/ton week-on-week to $1060/ton CIF Vietnam, LC AS term. “The most discount we could offer is $20/ton from the initial price list. We can’t go any lower,” an international trader offered on behalf of the producer added.

Vietnamese buyers are not very confident about the sustainability of the current trend in the PE market.

Sources are pointing to the lack of support from demand and upstream cost for a sustainable firming trend. Many buyers describe the current development as odd while decided not to participate in any bid.

“We have already purchased enough materials. The macro environment is not conducive, as China-USA trade talks might not yield any result while energy complex remains just so-so,” a local trader commented.

“For us, the peak manufacturing season might end in a month or less. Outlook after the Lunar New Year remains uncertain. We prefer to be conservative,” a buyer placed bids for Saudi LDPE film at $1000/ton added.   

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Vietnam