Vietnam PP Market In A Bearish Mode Amid Virus Resurgence, Rainy Season
- Buyers are holding back purchases amid slow demand for end-products
- Pricing outlook firm on monomer costs
- Downstream factories cut back operating rates
Market sources revealed to SSESSMENTS.COM that Vietnam PP market is in a bearish mode amid concern over the second wave of Coronavirus infections and rainy season. In the domestic market, most suppliers opted to roll over offers for local and localized PP cargoes from a week earlier. However, as crude oil prices continued its bullish run, a local producer initiated a price increase of VND500,000/ton ($21/ton) for PP Homo Raffia as compared to last week. From the import market, a South Korean producer quoted lower offers for PP Homopolymers grades to the Vietnam market this week in a bid to boost sales and to match competitive offers from other suppliers. On a weekly comparison, some buyers received import offers for PP Homo Injection and PP Homo Raffia from the producer between $20-30/ton lower, available between $970-990/ton on LC at sight, CIF Vietnam Main Port basis. As for Middle East origin, current offers for Saudi PP Homo Raffia cargoes are largely unchanged from last week’s level, mostly available at $970/ton with the same payment and delivery terms. Considering the current market situation, several customers voiced out their buy idea for the cargoes at $60/ton lower than the initial offer level.
Demand-wise, Vietnam PP market continues to face strong headwinds amid an alarming resurgence of coronavirus outbreak, coupled with the onset of the rainy season. Buyers in Vietnam prefer to halt procurement activities as the rainy season continues to present challenges for end-products sales. Besides, as the relentless rally in crude oil prices has sent most commodities prices spiralling upward, buyers in the country show a stiff resistance toward higher offers. In the production sector, downstream factories cut operation rates to match current demand conditions, due to a large drop in demand in domestic and export destination countries. Sources mentioned that production at several manufacturers is running at less than 50% of normal capacity. On the supply front, no significant issue was reported to SSESSMENTS.COM.
For the outlook, most market players in Vietnam voiced out to SSESSMENTS.COM that there would be room for import PP offers to move higher in the near term, taking into account the uptrend in monomer costs. On the back of the traditional belief regarding Lunar July, some opined that the slower-than-expected demand improvement might put a cap on further price increment.
