Import PP, PE to Vietnam remains firm, defying softening trend in China

Import PP and PE to China has been following the softening trend over the past several trading days as a result of falling futures trading on Dalian Commodity Exchange and slower than expected pre-holiday replenishment activities.

Chinese traders are stepping up effort to speed up sales process to deplete cargoes ahead of the long National Day holiday, causing a $30-40/ton drop in specific PP and PE cargoes this week. Players are expecting other suppliers to follow the trend in the coming days. However, such development in China does not seem to affect the general sentiment in Vietnam so much, and overseas sellers are maintaining very firm stance on the prices.

Couple of deals for Middle Eastern LLDPE film are concluded in Vietnam today at $1210-1220/ton CIF, LC 0-60 days term, which are higher than the buyers’ price ideas. Players were expecting more rapid decline in prices, yet force to accept the current levels due to tight availability from the overseas suppliers. “However, the number of deals are very limited and at discounted levels compared to initial offers. Buyers are very conservative about making large purchases,” a marker source informed.

Deals for import Saudi Arabia homo-PP are reported that $1180/ton CIF Vietnam, LC AS term and prices at $1165-1170/ton range that were reported in the previous week have not repeated. Converters are restocking to maintain safe inventories level while traders are far more reluctant.

The question players are looking at is the sustainability of the current trend. Sentiment in China might worsen in the coming week as the long National Day holiday draws near, which might put additional weight on Vietnam market. The tug of war between tight availability from overseas supply and softening demand is becoming intense.