Vietnamese players: Import HDPE film stagnating, converters seek alternative materials

As import HDPE film to Vietnam hit multi months high levels, demand in the country started to retreat and in spite of the recent surge in the upstream ethylene costs, many suppliers have to agree to discount in order to attract deals. This has resulted to a stagnant to slightly softened market condition throughout the past week.

Data from CommoPlast Price Index shows that the average import HDPE film prices to Vietnam have been ranging $1285-1300/ton CIF, LC AS term for about five weeks in a row. While sellers are facing much struggle to implement further hike though lacking inventories pressure, converters in the HDPE bag sector are searching for alternative lower costs materials in order to sustain the already thin profit margins.

“We are reducing the proportion of HDPE film in our product, instead mixing with HDPE blow molding. End product demand is weaker than expected since our customers are not accepting the hike in raw material costs,” a converter said.

The biggest question that players are asking at the moment is that would prices continue to go down or is a rebound possible? It is an intense tug of war between limited supply, high ethylene costs and lethargic demand condition.

Looking at the combination of strong ethylene costs, slow supply recovery and strong demand from other country in the region, i.e. Japan; market is less likely to witness any drastic downward movement. However, some small discounts must be given to encourage purchases, especially when the traditional off-peak season is just around the corner.

Import HDPE film to Vietnam currently stand in the range $1270-1295/ton CIF, LC AS term.