Chinese buyers shy from USA cargoes, suppliers veer attention to Vietnam market

Chinese buyers shy from USA cargoes, suppliers veer attention to Vietnam market

As the trade conflict between China and the USA escalated to a new level, Chinese buyers are now too concern over the near-term prospect and tend to avoid the intake of USA’s PE cargoes. In fact, both countries have slapped 25 per cent tariffs on the first targeted product list that worth USD 34 billion from each side, and the second targeted product list that include many petrochemical items is facing a high threat. 

This week, USA origin cargoes are available at $1120/ton for LLDPE film and $1180/ton for HDPE injection, all based on CFR China, LC 60 days term. “However, customers are not responding and we decided to divert the allocation to the near-by Vietnam market,” an international trader reported. 

Another major Chinese trading house reportedly open offers for off-grade USA materials to Vietnam after failed to attract buying attention in the domestic ground. “Vietnamese customers are waiting for additional reduction, therefore, we have not been able to conclude any deals for now. Chinese buyers fear that new tariffs would be implemented when cargoes are on the water, which explains to the recent reluctant stance,” the source added.

In the Vietnam market, USA materials have been consistently showing up over the past several weeks, though available quantity is still limited. An international trader reported having sold about 400 tons of USA LLDPE film Mi-2 at $1130/ton in the previous week said, “We are now having LLDPE film Mi-1 grade at $1120/ton CIF Vietnam, LC AS term. Customers are placing bids at $1080-1100/ton, but we are unable to accept such low levels.” 

More cargoes are expected to emerge in late quarter 3 as new USA plants stabilize production rate. As reported earlier, Dow Chemical, ExxonMobil and Chevron Phillips have commenced commercial production at their new PE units in Texas since late 2017.