Vietnamese PE players: Wait not! PE Supply might Tighten Further

With overseas suppliers announced fresh PE offers for February shipment with relatively large increases from last month, Vietnamese players are showing little hesitation to make at least some small purchases, fearing that the current firming trend might persist until the coming month.

A Saudi Arabia producer lifted HDPE and LLDPE film offers to Vietnam by $50-60/ton earlier this week reportedly sold out all available quantity with $10-20/ton discount. “Demand for LLDPE film is surprisingly good. We did not have sufficient quantity even for regular customers,” a distributor said. The source added that allocation for this month has been cut 50 per cent due to plant issues.

A buyer confirmed purchased 2 containers of LLDPE film and 1 container of HDPE film said, “The supplier later slash LLDPE film allocation by half, leaving us only 1 container. We are looking for additional quantity to fill in the gap.” Other sources are unable to obtain any quantity due to out of stock.

Another Saudi major introduced $30/ton increased on LLDPE film to $1220/ton, $50/ton on HDPE film to $1340/ton and $110/ton on HDPE blow moulding to $1320/ton, all based on CIF Vietnam, LC AS term. The maker has sold out the allocation without any discount. “Supply is very tight, hence we decided to buy though prices have surged very high. Local market is on the rise too, and it does appear that the supply is not going to ease anytime so soon,” a buyer commented.

In fact, a series of PE plants are entering maintenance shutdown in quarter 1 this year, which might deprive the already tight market condition even further. Players were initially hoping to see an eased in cargoes availability after the long Lunar New Year break, however, they might find disappointment. “This is because major producers are also absence during the holiday, and the pile up inventory might not even be sufficient for March and April shipment,” a producer commented.

Following are the detailed maintenance shutdown schedule from January to March2018.