Vietnamese Buyers Dissatisfied With Current Import PE Prices, Prefer Localized Materials
- Import offers remain unworkable, localized offers deemed more competitive
- Domestic demand remains slow, players cited the reason behind
- Players foresee limited room for further adjustment in PE prices
Vietnamese buyers stated to SSESSMENTS.COM that they are dissatisfied with the current import PE prices and prefer sourcing localized materials. On the week commencing June 22, import offers from various foreign producers have emerged in the Vietnam market mostly with notable increments. For Middle Eastern cargoes, import offers from the leading Saudi polyolefins producer moved higher by $40/ton for HDPE Film and $60/ton for LLDPE Film C4, both compared to a week earlier and the shipment is from Singapore. Likewise, July shipment offers from another Saudi producer for both HDPE Film and LLDPE Film C4 surged by $90/ton on a monthly comparison. From the Asia market, import offers for HDPE Film and HDPE Yarn of India origin were stable from last week’s level. Thai HDPE Film and LDPE Film were hiked by $20/ton and $10/ton, respectively, compared to a fortnight ago. For South Korean cargoes, the producer initiated steep increment as much as $100/ton for HDPE Film, $90/ton for LDPE Film, and $110/ton for LLDPE Film C4. Responding to the import offers, Vietnamese buyers perceived that the current level is too high and unworkable considering the sluggish domestic demand, particularly for end-products. As such, those buyers that need to replenish stocks prefer sourcing localized materials rather than import since the offers are deemed more competitive.
In the local market, a trader is offering both localized HDPE Film and LLDPE Film C4 of Saudi origin at VND23,000,000/ton ($985/ton), captured stable compared to deals concluded last week. Meanwhile, another trader adjusted up localized offers for LLDPE Film C4 of Saudi origin by VND500,000/ton ($21/ton) on a weekly comparison with deals achieved at the initial offers at VND23,500,000/ton ($1,006/ton). All offers are on cash, FD Vietnam basis and including 10% VAT, SSESSMENTS.COM noted.
Demand-wise, a slight improvement is seen but the overall buying sentiment remains bearish this week. Some traders cited that demand is dampened by the weather condition; which is extremely hot weather in the Northern area and pouring rain in the Southern area. Aside from that, buyers are indeed reluctant toward high prices, especially for import cargoes. From the converters' side, the digestion rate of finished products remains unhealthy this week, hence, stocks on their hands are ample. Some converters said that end-product sales in the domestic market are only around 40% from normal sales, while from the export market are worse than domestic; only about 10% from normal sales. On the production sector, some converters are running at 50-60% from the normal rate. However, Vietnam is by far the most improved market among other Southeast Asian countries, players opined. On the supply side, no significant issues reported to SSESSMENTS.COM this week.
For the outlook, the majority of Vietnamese market players contacted by SSESSMENTS.COM believe that the uptrend in PE prices already reached its peak. Therefore, the room for PE prices to move further up is rather limited in the days to come. In terms of demand, players foresee that demand will remain stagnant in the upcoming week.
