Vietnamese buyers resist higher PE offers; sellers hold upper hands

Over the past week, most international suppliers have announced fresh PE offers for September shipment to Vietnam with moderate to large hike compared to last month. A good number of deals were reported at $1130-1140/ton for Middle Eastern HDPE and LLDPE film during the mentioned period, based on CIF Vietnam, LC AS term. However, buyers are becoming reluctant to make replenishment as more offers emerged at nearing the $1200/ton threshold.

Traders are especially cautious given comfortable stock on hand while domestic demand outlook might not be as strong as expected in the coming month. “Our customers are carrying high end product inventories and only re-stock if raw material prices are low enough. We have suspended all purchases at the benchmark of $1150/ton for both HDPE and LLDPE film, while holding on to the remaining cargoes, hoping that local ground would catch up with international trend soon.”

A Saudi Arabia producer in the previous week opened new offers at $1170/ton for LLDPE film and $1160/ton for HDPE film, an increase of $30/ton and $60/ton respectively from last month. Distributors for these cargoes have not been able to conclude any deals since the maker refused to enter any price negotiation. “Buyers have not been able to accept these offers. This condition is not expected to persist, as supply is very tight following the shutdown at several petrochemical plants in Houston, USA due to hurricane. Buyers might need to replenish at even higher levels in the coming weeks.”

Another Saudi Arabia producer offered cargoes at $1180/ton for HDPE film and $1190/ton for LLDPE film, CIF Vietnam, LC AS term. A source close to the producer also reported limited availability while adding, “We have been able to conclude deals in China at $1180/ton for both HDPE and LLDPE film, and therefore we expect Southeast Asia market to firm up too. Supply across the continents is tight and this trend might extend to fourth quarter of the year.”

Import HDPE film to Vietnam currently stands at $1160-1180/ton and LLDPE film at $1170-1205/ton, all based on CIF, LC AS term.