SSESSMENTS.COM was informed that a Vietnamese converter skipped PE procurements due to buffer stock and suspicion on supply condition. The offers for import LLDPE Film C4 from Thailand are available at $940/ton, which is at $60/ton higher compared to last month’s done deal level. While for LDPE Film, the offers are $40/ton higher compared to the same period. Following the upward adjustments, the converter decided to skip the procurement activity as the offers are deemed too high and also the contrary to last week’s expectation. Moreover, the converter already made purchases in the previous two weeks that would be sufficient for two months of production. Previously, the converter already stocked up cargoes that would be sufficient up to four months of production as well in April, when the prices were very low. As such, the converter will only buy on a hand-to-mouth basis for now and upcoming procurement activity will most likely be done by the end of June. Meanwhile, the offers for Singaporean LDPE Film and LLDPE Film C4 captured between $960-970/ton and $920/ton respectively. All offers are on LC at sight, CIF Vietnam Main Port basis.
As reported to SSESSMENTS.COM, the demand for plastic bottle packaging slightly improves between 5-10% on a weekly comparison. Despite the improvement, the demand could not be considered as strong yet. According to the information received, the demand from the export market is still slow as well as the European market as their main target market has not fully recovered yet. Around the same time last year, the converter usually received orders for packaging with a special design for Christmas preparation that will be shipped in September-October. However, there are no orders submitted yet and the demand from the export market decreased by 50% compared to the same period last year.
The converter stated that the outlook for the PE market will be difficult to predict, as such, prefer the sideline position at the moment while monitoring the market movement before making purchases. “We are also wondering why most suppliers are citing limited allocation but there is no detailed information about it. Hence, we have to be cautious,” the converter added to SSESSMENTS.COM.
