Local PP, PE prices in Vietnam softened on limited demand

Following the recent cuts in import market, local traders in Vietnam started taking a more aggressive stance to stimulate domestic demand by introducing larger price reduction. Compared to last week, offers for locally held PP and PE cargoes drop approximate VND300,000/ton ($13/ton), and yet very limited deals observed.

On the first trading day of the week, local LLDPE film prices stand at VND30,000,000-30,600,000/ton ($1195-1220/ton without VAT), HDPE film at VND34,200,000-34,800,000/ton ($1362-1385/ton without VAT) and homo-PP at VND32,200,000-32,400,000/ton ($1283-1290/ton without VAT), all based on FD Vietnam, cash equivalent.

Many converters have adopted the wait and see position, predicting that more discount would emerge in the coming days. A HDPE bags manufacturer said, “We are making huge losses due to high raw material costs. Most of our customers refused to place new orders; hence we are in no rush to make replenishment. Our regular suppliers have called several times to offer discounts on Saudi HDPE film, and we prefer to hold purchases for now.”

Another converter received offers for LLDPE film with VND300,000/ton reduction added, “We are not seeing the bottom yet. End product customers are very reluctant to place the new orders, regardless of stronger ethylene and crude oil markets. April might be a soft month in Vietnam, too.”

While supply for HDPE film remains relatively tight, many large-scale traders in the country are holding a comfortable stock for LLDPE film. “Demand is extremely slow. At the current prices, we manage to breakeven for on hand cargoes. However, if prices continue to slide, we are technically making loses. Demand might only pick up if China started to replenish material,” a trader said.

Vietnamese buyers are generally not optimistic about the near-term market outlook, especially at the current international trade environment. “We are very concern that the USA might initiate an antidumping investigation on plastic packaging from Vietnam. Though sales to the USA only mark up a small portion of our customer based, it could affect the sentiment to a certain extent,” another buyer added.