Indian and Saudi makers lifted homo-PP offers to Vietnam regardless of the soft purchasing interest

After several quiet trading days, major suppliers from Indian and Saudi Arabia started opening new import homo-PP offers to Vietnam, mostly at higher levels, totally shrugged off the soft demand condition in this market. 

At the time this report is published, Indian homo-PP stand at $1080-1100/ton for both yarn and injection, and Saudi materials reaches $1100/ton, all based on CIF Vietnam, LC AS term. These new prices are $10-20/ton higher from last week.

Firmer upstream propylene costs and lower inventories pressure are the main support for the increases, but buyers have already replenished comfortable inventories in the previous down-cycle and prefer to adopt a wait and see stance.

The general expectation is that deals concluded might be at the stable levels. “Local demand is just too soft. And the plunge in the energy complex has just hit the sentiment very hard,” a local trader said, adding that only homo-PP injection grade is gaining strength in the domestic ground due to the lack of supply.

Another reason for buyers to doubt the sustainability of the current trend is the continued presence of competitive duties-free cargoes from Southeast Asian and Chinese suppliers. In fact, several buyers reportedly concluded deals for Chinese homo-PP yarn at $1090/ton CIF Vietnam this week. “The firming trend would definitely be held back to a certain extent,” another buyer added.  

However, sources did not expect the market to dive below the previous low seen during early December. Buying interest might see some improvement in January as players might make pre-Lunar New Year replenishment, sources said while the outlook for February remains cloudy at the moment.