Import homo-PP to Vietnam rebound from five falling weeks, demand moves gently

Import homo-PP to Vietnam recovered visibly this week following five consecutive weeks of continuous falling amid persistently weak demand after the Lunar New Year holiday. Compared to the cyclical bottom taking place during late March, homo-PP prices have firmed up $25/ton on an average and buyers started to make small purchases in anticipation of further hike in the near term.

In fact, a Saudi major reportedly insists on keeping homo-PP cargoes in the range $1250-1255/ton CIF Vietnam, LC AS term, has managed to close some deals. “Few customers have engaged in replenishment at the new prices. Supply is tight and we think more customers would return for purchases soon,” a trader sells the cargoes on behalf of the producer said.

Another Saudi maker, who sold April shipment cargoes to Vietnam at $1240/ton CIF, LC AS term, is now planning to implement $30-40/ton hike for May shipment offers. “Prices below the $1260/ton threshold might soon disappear, and new offers would be in the range $1270-1280/ton CIF Vietnam term. We are having very limited quantity for homo-PP, and with the recent pick up in demand in China, we are positive about the near-term outlook,” a source close to the market said.

Market participants are now posting a question on whether prices could return to the previous highs of above $1300/ton threshold. A majority of respondents are rather pessimistic. A source said, “The most important factor is that converters must have good orders for end products. At the moment, it is the off-peak season, and therefore, we only expect import market to remain stable to slightly firmer instead of any major hike.” 

“Would trade tension between China and the USA escalated, which might affect plastics end products exports from China, Vietnam is not in the position to benefit given that flexible packaging products from Vietnam are facing tough anti-dumping duties in the USA. And as Chinese exports seek new export destination, Vietnamese converters might face stiff competition. The macro trade environment is not very conductive, which might limit raw material prices from drastic increases,” another source added. 

A number of large-scale converters in the country reported having comfortable stock until late May to early June, from which this category of buyers might prefer to wait on the sideline if market firm up. “Besides, non-dutiable cargoes from China and Philippines are available in the range $1260-1270/ton CIF Vietnam that attracted great attention from buyers. Dutiable materials might find it hard to achieve full hike target this time,” another buyer said.