Fear Of Second Wave Of COVID-19 Hinders Vietnamese Buyers To Replenish PP Cargoes
- Local producer adjusted PP Homo Raffia offers at a shocking level
- Buyers showed resistance towards current high PP prices
- Market players shared a different opinion regarding PP prices outlook
As informed to SSESSMENTS.COM, fear of the second wave of COVID-19 hinders Vietnamese buyers to replenish PP cargoes. On the week commencing June 29, localized Chinese and Indian PP Homo raffia increased by VND200,000-500,000/ton ($9-21/ton) on a weekly comparison. Likewise, a trader moved up localized Saudi PP Homo raffia offers between VND500,000-800,000/ton ($21-34/ton) compared to the same period. In contrast, a local producer is offering PP Homo Raffia for final allocation of July delivery at below-market prices at VND21,600,000/ton ($924/ton) on cash, FD Ho Chi Minh basis and excluding 10% VAT on the back of a dire need of cash. As compared to last week’s level including VAT, these offers are VND2,700,000/ton ($115/ton) lower. In the import market, a trader mentioned that at the moment, import PP prices in Vietnam is the highest among other Southeast Asian countries. This week, July shipment offers for Saudi and South Korean PP Homo Raffia moved higher by $60-70/ton compared to June shipment. While for PP Homo Raffia offers from another Saudi PP producer are available at $40/ton higher on a weekly comparison. As for other grades, July shipment offers for Emirati PP Random Copolymer Injection surged by $60/ton compared to June shipment.
According to market players, PP demand in Vietnam remains slow this week. Buyers showed resistance towards current high PP prices; which dampened buying sentiment in the country. Moreover, most buyers prefer to halt replenishment activity in anticipation of the second wave of the COVID-19. Likewise, finished product demand for construction packaging sectors remains slow and currently, most converters in these sectors are running at around 50% from normal production. However, a rice packaging converter stated that the company still has to run at full capacity despite slow finished products demand as a lot of monthly fixed costs that added up. On the supply side, no significant issue was reported to SSESSMENTS.COM.
Looking ahead, some market players opined that PP prices still have room to increase further considering the uptrend in crude oil and monomer prices. However, the rest believed that PP prices will decrease as PP demand is expected to be slower due to the big possibility of the second wave of the COVID-19, as stated to SSESSMENTS.COM.
