Vietnamese traders cut local homo-PP prices following the import market

Vietnamese domestic traders reportedly down-adjusted local homo-PP offer on the final trading day of the week following the recent development in import ground. Sources informed of seeing VND100,000-400,000/ton ($4-17/ton) reduction in the latest offers to VND33,400,000-34,100,000/ton ($1334-1362/ton without VAT), FD Vietnam, cash equivalent.

The reductions, however, failed to stimulate purchasing interest, several traders complained, as the market is in mid of the off-peak season. “Customers are waiting for further cuts in the coming days considering the recent arrival of previously purchased cargoes at much lower costs,” a source added.

Buyers here become even more cautious this week as the new startup – Nghi Son Refinery and Petrochemical begins offering trial PP cargoes. There are only 217.5 tons available for auction-like selling method without grade specification attached. “This indicates a possibility that more quantity from the producer would arrive the market in the coming month, which might change the market equilibrium and we prefer to hold the wait-and-see position to avoid risk,” a converter said.

Earlier this week, overseas suppliers stepped back on import offers to Vietnam due to persistently weak demand condition. Import homo-PP to Vietnam currently stand at $1270-1290/ton for injection grade and $1290-1320/ton for yarn grade, all based on CIF, LC AS term.

A number of converters have expressed the intention to return for new replenishment if mainstream yarn cargoes reach $1270/ton in the coming week. “The near-term outlook is not bullish though tight supply from Middle Eastern producers might limit the extent of price reduction. We are waiting for adjustment now,” a converter said, adding that end product demand is weak.