Vietnamese players: Import homo-PP might be nearing the peak

The import homo-PP market in Vietnam has been following the firming trend after hitting the cyclical bottom on the final weeks of March 2018, adding approximate $70/ton over the spread of seven weeks, data from CommoPlast showed. The average value for import homo-PP yarn once again surged above the $1300/ton threshold this week, which seriously hurts the purchasing interest.

Lack of availability, especially for Middle Eastern cargoes is the primary driver for the constant firming trend over the past two months and this trend might persist in the near term. A Saudi Arabia producer informed, “We have sold out all available cargoes for May to other markets including South Africa and Indian Subcontinent and therefore, free from any inventories pressure. We plan to introduce a small hike on June shipment offers.” 

However, demand is not catching up in this market and higher prices are now facing stiff resistance, which likely to cap any further price advancement. “In our latest offers for Saudi homo-PP at $1290/ton CIF Vietnam, LC AS term, only converters agreed to make replenishment while local traders have withdrawn to the sideline. Sales start to drop as prices increase,” an international trader commented.

A woven bag converter received offers for Middle Eastern homo-PP yarn at $1300/ton CIF Vietnam added, “The supplier insisted to deal at the offered level while most other sellers are not having quantity. The price is too high and we might have to postpone purchases until June hoping that market would enter some minor correction.”

As the general sentiment becomes sluggish, Vietnamese buyers believed that market is nearing its peak and refuse to enter deal for cargoes priced above the $1300/ton threshold. “Learning from the historical trend, we prefer to take a cautious stance at the moment. It is also the traditional low demand season,” another market source added.