Import homo-PP to Vietnam gains ground, but post-holiday trend might see 2017, 2018 repeated

As the Lunar New Year festival draws near, the market would expect trading activities to slow down, which potentially depress the prices. But this is not exactly the case for import homo-PP yarn to Vietnam. 

In fact, for three years in a row, overseas sellers have introduced fresh hike in the pre-holiday period, of which in 2017 and 2018, the uptrend remained intact for up to four weeks after the festival before losing momentum. The question Vietnamese players are asking is that would the post-holiday period of 2019 revisit this trend?     

For the pre-holiday phase, the average import homo-PP yarn to Vietnam jumped about $45/ton from the first week of January to reach $1115/ton by the week ending 25 January 2019. The uptrend is likely to persist in the near-term looking at the firm posture regional and international suppliers have been portraying following the healthy sales results achieved in the near-by China market.

The lack of inventory pressure might allow suppliers to hold firm on prices when buyers come back from the Lunar New Year festival on 11 February. However, buyers here are not very eager in keeping too long inventories, simply for three factors: 

1. USA-China trade truce sees an uncertain outcome

Vietnamese converters in the woven sack sectors are not directly benefited from the USA-China trade war due to the on-going anti-dumping investigations on import laminated woven sack from Vietnam. In October 2018, preliminary findings suggested a dumping rate of 161.16% on five mandatory respondents in Vietnam while other entities face 292.61%. However, escalated trade tension between China and the USA might hurts sentiment in China and potentially reduce the demand for raw material. 

2. New supply to emerge 

It is reported that Malaysia’s PRefChem has started the trial run at its newly constructed PP unit in January 2019 and assuming no major mechanical issues detected, the company might reach on-spec production soon. Supply condition within Southeast Asia alone is set to increase considerably with the expansion at Philippines’ JG Summit and Indonesia’s Polytama and Chandra Asri. Besides, Vietnam’s Hyosung is planning to start-up the first phase of the PP project within 2019, adding more availability to the market. 

3. The traditional off-peak season 

The February-March period is regarded as the traditional off-peak season for the PP sector in Vietnam, which buyers tend to adopt a wait-and-see stance instead of aggressively scouting for new stocks unless prices are attractive enough.

“We are covered until mid of March. With the increasingly volatile market, we prefer to adopt a conservative stance. Local supply is comfortable at competitive prices. We are in no rush at the moment,” a converter commented.