Tight supply continues to push import LDPE film higher in Vietnam

Despite a rocky road, import LDPE film to Vietnam has now reached the highest level in 2019, all thanks to the tight availability across the region due to several plant issues.

The slight dip in the previous week was attributed to the lack of the higher-end prices previously hold by Malaysian cargoes, which have already been sold out. But compared to the bottom prices during the second week of the year, the average import LDPE film based on CIF Vietnam has surged about 6.3% to approximately $1100/ton at the time this report is published.  

Apparently, Thailand’s PTT has not been able to resolve a stubborn technical issue that kept its 300,000 tons per annum LDPE plant shut since late February. As reported earlier, many Vietnamese traders decided to re-export Middle Eastern cargoes to Thailand to fetch better prices.

The shutdown at Qapco’s one of LDPE lines worsens the tightness situation. The 230,000 tons/year unit was shut in late March for about two weeks. 

Recently, Iran’s Kordestan Petrochemical unexpectedly shut down the 300,000 tons/year LDPE line following an ethylene pipeline explosion that disrupted feedstock supply to the plant. 

A Saudi Arabia producer claimed having sold out LDPE film cargoes to Vietnam at $1100-1110/ton CIF, LC AS term said. “Customers are very reluctant at first, but finally accepted the cargoes due to limited supply condition. We are not having any quantity on hand at the moment.” 

Meanwhile, another Saudi Arabia maker decided to lift offers by $10-20/ton from last week to $1090/ton with the same term and customers are considering the purchase. “We are negotiating with the supplier to obtain the old prices and currently waiting for feedback,” a buyer added.

Although customers are proceeding very cautiously, it is expected that the current firming trend might persist in the near term, as the manufacturing season should start soon.