Higher import homo-PP faced resistance in Vietnam; sellers cut back hike target

Late last week, international traders lifted import homo-PP offers to $1200/ton CIF Vietnam, LC AS term for several cargoes originated from Saudi Arabia. However, the move bumped into stiff resistance from buyers, who are struggling to transfer the higher raw material costs to end product prices.

Today, same traders decided to step back on the hike target, opening new offers for the same cargoes at $20/ton lower - $1180/ton CIF Vietnam, LC AS term, Only couple of buyers agree to make purchases at the adjusted offers, though at very small quantity. A trader said, “Overseas supply is tight and we think this would keep the market at the firm not for longer period of time. Therefore, we decided to take 50 tons only.”

Another trader added, “We placed bids at $1160-1170/ton and the supplier rejected, hence we decided to accept the $1180/ton level to take minimal quantity. And due to limited availability, we would only receive the confirmation by tomorrow.”

Converters are on the other hand, are struggling to transfer the recent hike in raw material costs to end product prices. “We decided to suspend all purchases as we are only able to convert 50% of the hike in PP into end product prices. We are bearing loses of the other 50%,” a woven bag converter said.

Vietnamese players believed that import homo-PP for dutiable origin might have seen the peak, though the limited supply condition might continue to support market to remains on the stable to firm notes. Any attempt to bring prices above the $1200/ton might immediately come down at the current demand status, market sources said.