PE demand remains strong in Vietnam

In Southeast Asia, sellers have been raising their PE prices throughout the region this week based on increasing upstream costs as well as improved sentiment in China.  Although sellers complain of difficulties concluding deals in much of the region, demand from Vietnam remains strong.

In Vietnam, sellers have reported seeing satisfactory PE demand over the past two weeks, leading several of them to concentrate their offers in Vietnam as buyers elsewhere in the Southeast Asian region are proving more hesitant to engage in purchases.  Participants in the region attributed the relatively brisk pace of demand in Vietnam to the need of many converters there to engage in re-stocking after a prolonged absence from the market as well as the fact that buyers in Vietnam are traditionally very sensitive to shifts in market sentiment in China, where buyers have also been restocking recently.

A Thai producer reported that they announced their November offers for HDPE film this week with price increases of $30-50/ton when compared with their October offer levels, bringing their new offers to $1200-1220/ton CFR SEA.  The producer said that they have already concluded some deals in Vietnam at the high end of the overall range, although they have not been able to finalize any deals elsewhere in the region as yet.  Meanwhile, a trader stated that they sold out their October allocation of South Korean material to the country at $1200/ton CIF Vietnam for HDPE film and at $1220/ton with the same terms for LLDPE film.  The trader said that demand has picked up in Vietnam this week in line with the firming trend and that they hope to have more material to offer to the country next month.  Another trader offering Iranian HDPE film commented that they have managed to conclude some deals to Vietnam at $1220/ton CIF Vietnam and have therefore raised their prices to the country by $10/ton to the level of $1230/ton with the same terms, while simultaneously adding that buyers elsewhere in Southeast Asia are showing resistance to their current offer levels.

Vietnam's local PE market has also been affected by the upsurge in demand in the country.  A distributor offering locally-held import PE to the country stated that they lifted their prices this week by $11/ton for HDPE film and by $27/ton for LDPE film in response to improved demand.  The distributor said that many converters in the country are operating with very low inventory levels these days and are consequentially feeling the need to restock.  On the converters' side, a household products manufacturer stated that demand for their end products is improving these days and that they therefore recently purchased some South Korean HDPE blow moulding at $1170/ton on CIF basis.  The converter said that the offers they have received for locally-held cargoes have risen $22/ton on a week-over-week basis as the availability of locally-held material is tight.