Vietnam's import homo-PP yarn market races lower following the plunge in China

The import homo-PP market in Vietnam continues to deteriorate following the latest plunge in China and the weakness in the upstream propylene costs. By the week ending 9 November 2018, the average import homo-PP yarn to Vietnam slipped to the lowest level since late March and potentially endures further reduction in the near term.

A majority of Saudi Arabia producers has agreed to offer homo-PP yarn at $1230/ton CIF Vietnam, LC AS term, and yet deals are not as satisfactory as expected. “We have purchased duty-free South Korean homo-PP cargoes at the same price level, too. It appears that suppliers are facing tremendous pressure and therefore, we plan to just purchase slowly while waiting for additional price cuts to emerge,” a woven bag manufacturer said.

In China, Indian cargoes were available at below the $1200/ton threshold while Vietnamese material that once concluded at as high as $1340/ton CFR China, LC AS term during the second week of October, has now plunged to $1240/ton with the same term. A good number of deals have been recorded for this origin on the final trading day of last week, sources said.

Vietnamese buyers are adopting a very cautious stance with a wide expectation that import homo-PP market might soon reach the $1200/ton mark in a matter of days. “Supply is improving while propylene costs might only extend the softening trend. Unless demand improves drastically, we do not see any major chance of a rebound during the first half of November,” another buyer added while reporting regular demand for end products.   

Propylene cost based on FOB Korea term on 9 November reached $1000/ton, down $135/ton compared to four weeks ago and hit the lowest level since early April this year.