- Local offers dropped between VND500,000-1,000,000/ton ($21-42/ton)
- Lowest offers for import PP Homo Raffia of Middle East origin heard at $750/ton
- Outlook remains pessimistic
SSESSMENTS.COM’s data showed that the local PP prices in Vietnam tracked on a stable to softer trend during March. On the week commencing March 2, local Homo Raffia offers had broken below VND27,000,000/ton-level, available between VND25,500,000-26,200,000/ton ($1,075-1,104/ton) on cash, FD Vietnam basis, and including 10% VAT. In the following week, most traders and producers maintained stable level for local offers from a week earlier despite a big drop in crude oil prices, citing that relatively tight supply in the market was the major ground behind the decision. Moving to the third week, some buyers received local PP Homo Raffia offers at VND500,000/ton ($21/ton) lower than levels available a week earlier. In the final week of March, a trader applied a hefty discount of VND1,000,000/ton ($42/ton) on local PP Homo Raffia prices as compared to last week. Sluggish demand in the market was cited as a factor pushing the trader to lower their offers.
Likewise, in the import market, SSESSMENTS.COM was informed that import PP Homo Raffia offers took a swing up and down in March. On the week commencing March 2, import offers for PP Homo Raffia and PP Homo Injection of Thailand origin surfaced in the market with a reduction of $10/ton and $30/ton respectively on a weekly comparison. Despite the price reduction, the offer level gained a negative response from buyers. Contrastingly, a supplier opted to increase the offer for Chinese PP Homo Raffia to the Vietnam market by $15/ton from a week earlier following the uptrend in the futures market. Moving to the second week, a Saudi producer initiated a price reduction of $20/ton for PP Homo Raffia cargoes to Vietnam as compared to last week. In contrast, import PP Homo Raffia and PP Homo Injection offers of China and Thailand origins remained stable as compared to the same period. In the week commencing March 9, most converters voiced out their buy idea for PP Homo Raffia cargoes of Saudi and China origin below $900/ton-level. On the week commencing March 16, import offers for Chinese PP Homo Raffia cargoes recorded stable to softer by $20/ton. Similarly, most Thai producers adjusted down offers for PP Homo Raffia, PP Homo Film, and PP Homo Injection between $5-25/ton from a week earlier. In the final week of March, import PP Homo Raffia offers of Indonesia origin were available between $825-850/ton on LC at sight, CIF Vietnam Main Port basis with done deals achieved at the low-end level of the price range. However, some traders mentioned that the high-end level of the price range for Indonesian PP Homo Raffia cargoes was deemed unattractive.
In general, demand in the Vietnamese PP market stayed in a downward trajectory during March. A number of factors have contributed to the weak demand, including concern over the Coronavirus outbreak, anticipation of lower prices, and sufficient inventory on hand. Further added, Coronavirus outbreak and Saudi-Russia’s oil price war have taken a toll on the market, pushing buyers to the sidelines and unwilling to replenish their stocks. On the production sector, some local factories reported still operating at a normal capacity despite growing concern over the Coronavirus outbreak. On the supply side, SSESSMENTS.COM was informed that the availability of PP cargoes remained sufficient during the month.
For the outlook, the majority of Vietnamese market players voiced out to SSESSMENTS.COM that that demand will continue to soften as most buyers prefer to halt procurement activities and adopt a wait-and-see stance amid market uncertainty and global headwinds.
