In Vietnam, PP suppliers have approached local and import markets with stable to firmer offers for the past two weeks. This was despite limited trading amid the impending Tet holiday, which refers to the country’s new year celebration and corresponds to the first week of February this year, just like China.
Import PP offers from Middle East indicate increases for Feb
A Vietnamese converter reported last week that the offers they received for Saudi raffia increased by $10-20/ton and noted, “We prefer to adopt a wait and see stance for now and we are planning to resume replenishing after the holiday season ends.”
Early this week, a trader reported that a Saudi producer lifted its February homo-PP prices by $20/ton when compared to January while PP block copolymer inj. offers indicated a smaller increase of 10/ton.
Local PP offers gradually recovers from one and a year half low
The firm sentiment in the import PP market was partially reflected on the local market, with prices posting small increases of around VND200,000/ton ($9/ton) on a weekly comparison.
A global trader operating in Vietnam’s local PP market commented, “Local PP prices followed the slight firming in the import market. We have been conducting good sales in the local market since the beginning of the month as local cargoes are more competitive than imports.” According to ChemOrbis Price Index, the weekly average of local homo-PP raffia prices in Vietnam has gradually posted slight increases since 2019 started. The market had entered this year at around their lowest levels since early July 2017.
Post-holiday expectations offer a mixed bag
Vietnamese PP players have been voicing mixed expectations regarding how the market will return from the week-long holiday.
The lingering uncertainty created by the China-US trade war and the volatility in crude oil futures pushed some players to hold stable to softer expectations about the post-holiday period.
Will new capacities in Vietnam inject pressure on PP?
Comfortable supplies in the local market and new capacities are also weighing on the market. Vietnam’s Nghi Son Refinery started operations at its 400,000 tons/year PP plant in 2018 while South Korean producer Hyosung Corp is planning to launch a new 300,000 tons/year PP plant in Ba Ria-Vung Tau, Vietnam, by the third quarter of 2019.
Will buyers return to replenish stocks?
On the other side, some players expect to see slight increases after the holidays given a possible improvement in replenishment activities as some buyers postponed their purchasing plans until after the holidays.