HDPE prices retain premium in Vietnam

In the first week of July, locally held HDPE film prices in Vietnam began to surpass the prices of other PE products, as per ChemOrbis. The premium on HDPE film continued as of the previous week on tight supplies. In the first week of August, locally held HDPE film prices carried a premium of as much as US$35/ton over LLDPE c4 film prices and US$24/ton over LDPE film, according to the average price on ChemOrbis Price Index. As of last week, the premium remained at plus US$18/ton over LLDPE and US$23/ton over LDPE film grades. The premium on HDPE film was due to tighter supplies, of which buyers had been complaining for the past month, although supplies of all of the PE products have been considered to be on the tight side due to production problems, previously delayed deliveries out of the Middle East and the Ramadan holiday affecting shipments. A trading source commented on the specifics of the production problems commenting, “PetroRabigh had a scheduled turnaround for its PE2 line, but was unable to resume production and we hear the line is still down. We are not sure if it will also affect their September cargoes. We have even heard that their PE1 line is down, although it is not confirmed. At the same time, we hear that Sabic has less supply since they are trying to run their new HDPE film grade which is a 3rd generation tri-modal product. The first generation was uni modal and the second generation was bi modal. It seems many of the producers are trying to focus on producing specialty grades to be more competitive.” He added, “We expect prices to be rolled over because ethylene prices are still expensive and any price adjustments will depend on demand conditions. We don’t expect a peak demand season for Christmas and Chinese New Year since there is a two month gap between the holidays.” Other traders in Vietnam concurred with these sentiments. A trader noted, “The past few months, PP and PE prices were on a firm note for different reasons. PP was firm due to feedstock costs, but PE has been firm on limited supply. Therefore, we feel PE has less risk of falling even though costs have softened. Supply for PE remains restricted, especially for HDPE film, and therefore we don’t expect PE prices to drop as much as PP. We maintained stable offers for now, but demand has weakened as buyers are waiting for price reductions.” According to ChemOrbis, a distributor said, “We maintained our offers for now. We think that PP prices may soften but not PE prices since supplies remain low for this product.”