Import PE prices steady in Vietnam, but pressure on the horizon

Players reported mainly steady import PE prices in Vietnam recently, as per ChemOrbis, but buyers are looking for price relief pointing to bearish pressure points on the market, while also watching the unsteady conditions in the Chinese market. One of the pressure points that buyers have highlighted were re-export offers coming from China. There have been scattered reports of re-export offers for both HDPE and LLDPE grades. A buyer reported yesterday, “We received re-export offers for Iranian origin HDPE film from China. The price was competitive compared to other import offers. There are no other offers at this level, most of the Middle Eastern materials are at least $20/ton higher. However, we did not purchase it because we have sufficient stocks for our production until the end of October, plus the material will not meet the quality requirement of our customer. We have not seen downward momentum yet in the import market, but our customers in Italy and France are delaying their orders claiming that the market is coming down.” A trader in China noted, “Generally, PE prices from China are not so competitive which has made it difficult for sellers to re-export their materials to other regions. There are actually not many cargoes arriving in China, but demand is slow. Normally it would pick up in September, but for some reason demand remains slow this month. Also, the market sentiment is not encouraging. There will be large new capacities of coal-based PE coming before the end of the year. Local producers are trying to control their output, but because of the weak demand they will eventually face downward pressure.” The local PE market in Vietnam is another pressure point as buyers have reported price reductions on locally held LLDPE prices. A converter reported, “We received new LLDPE prices from a local distributor with around a $10/ton decrease from last week, but we prefer to wait before purchasing because local prices will likely come down further as the peak season for Mid-Autumn packaging is over. Plus, there are re-export cargoes offered to the country which could cause traders to panic and want to sell faster.” A trader concurred that locally held LLDPE offers were reduced this week noting, “We lowered our offers by approximately US$10/ton from last week, but customers are still showing resistance to purchasing. We sold out our HDPE and LDPE film grades, but we don’t plan to replenish for now as import prices are too high while local prices are softening.” According to ChemOrbis, a buyer made similar comments about not wanting to replenish materials from the import market commenting, “Import prices are too high so we are temporarily buying from the domestic market now.”