Newly Start-up PP Producer In Vietnam Unmoved By International Market Trend, Aim To Gain Interest And Remain Competitive
- Some local sellers held back from making hefty price adjustment despite current uptrend
- Import Middle Eastern PP Raffia offers crossed $900/ton-level
- PP demand predicted to slow down further
SSESSMENTS.COM was told that the newly start-up PP producer in Vietnam remains unmoved by the international market trend, aiming to gain interest and remain competitive in the local market. For the week commencing June 1, the offers for local PP Homo Raffia and PP Homo Injection increased by VND100,000/ton ($4/ton) and VND200,000/ton ($8.5/ton) respectively from last week. Sources explained that a new local producer decided to make a minimum adjustment on the offers in order to attract the buyers’ interest as a newcomer. As such, some sellers restrained from making significant increments so that their offers will be able to compete with the newly start-up PP producer. For localized Saudi PP Homo Injection cargoes, the offers were also captured higher by VND500,000/ton ($21/ton) compared to last week. From the import market, the offers for PP Homo Raffia from the leading Indian petrochemical and the leading Saudi polyolefins producer are available at $870/ton and $930/ton respectively. However, sources opined that the offers are too high and buyers are most likely unwilling to accept such a level. Additionally, sources also opined that the offers for Saudi PP Homo Raffia between $830-860/ton-level will only be workable for exporters. For PP Homo Injection cargoes from a Thai producer, the offers to the Vietnam market surfaced with an upward adjustment of $50/ton on a weekly comparison following the higher offers in Thailand’s domestic market. As the offers are considered too high, sources said that the response is expected to be poor.
Despite the price increment, market players stated to SSESSMENTS.COM that the demand for PP in Vietnam is still sluggish as the demand for end products remains slow. Some converters revealed that the company is running the operating rate at 40% from the normal rate while other converters stated that the current inventory is sufficient for up to three-month productions. On the supply side, buyers were informed by Thai IRPC that volume for PP cargoes is limited.
Looking ahead, market sources predict that PP demand will be slowing down further in July due to the rainy season. As such, PP offers are likely to be soft following the demand condition in the coming month, SSESSMENTS.COM was told. Market participants also stated that now that there are three local PP producers in the country, supply is expected to be ample in the future.
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