Pricing Strategy From New Vietnamese PP Producer Fueled Up Competition Among Sellers, Will It Drag Prices?
- The new local producer offered PP Homo Raffia at attractive levels
- Inquiries for PP Homo Injection increased
- Market outlook remains cloudy
For the week commencing May 25, SSESSMENTS.COM noted that local PP Homo Raffia offers in the Vietnam market increased between VND200,000-500,000/ton ($8-21/ton) on a weekly comparison. As reported, a new local PP producer is offering materials at the lowest level to attract buyers. Local PP Homo Raffia offers from the new local producer captured at VND23,000,000/ton ($982/ton) on cash, FD Ho Chi Minh basis and including 10% VAT. Some traders said it is hard for other local PP producers to compete with such low prices. In the import market, offers for Saudi PP Homo Raffia cargoes reported up by $10-20/ton on week-on-week comparison. Likewise, offers for PP Homo Raffia and PP Homo Injection of Thailand origin maintained firm at and above $900/ton-level. However, a trader opined that this is just the Thai producer’s strategy to test market responses before finally decreasing the offers again to suit the Vietnamese buyers’ acceptance level. Market sources also said that the uptrend in PP prices in both local and import market is supported by current higher feedstock prices.
This week, PP Homo Raffia demand in the Vietnam market is considerably slow while for PP Homo Injection, a trader reported that the company received quite a lot of inquiries. For the finished product, some converters saw a slight improvement in sales from last week, yet cannot be considered as strong. The overall PP demand in Vietnam remains dull despite the uptrend in prices. No supply issues were reported by market players in the country to SSESSMENTS.COM.
For the outlook, the majority of Vietnamese market players expressed to SSESSMENTS.COM that the price uptrend would not last long without strong support from end-products demand. Market players opined that even though there is a slight improvement in end-products demand at present, but the future market still depends on the international trend. Moreover, with the coming rainy season in the country, the PP prices are expected to decline between July-August.
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