17 July, 2018
In Vietnam, homo-PP raffia prices have been tracking a mostly softening trend since they hit a three-year high in around late May. Persistently weak demand amid seasonal rains has kept the market under pressure this week while the weak sentiment in China also weighed on PP prices in the country.
A converter reported, “Local PP prices have added to their slight decreases this week, yet we still find the current offer levels to be too high and limit our purchases according to our urgent needs. Demand towards our end products is currently weighed on by the rainy season while the market will be slower in August because of the Ghost Month.”
Despite the recent depreciation of the Vietnamese dong against the US dollar, local PP prices have continued to lose ground in the face of buyers’ growing resistance. “The PP market increased too much in May. We believe that prices should see further downward adjustments,” a buyer said.
In the import PP market, a few traders commented, “The market is moving quite slowly given the low season while the ongoing exchange rate risks amid the US-China trade war is also weighing on demand. Buyers are placing $20-40/ton lower bids, yet they are not willing to build any extra stocks for the moment, believing that the market has room for further reductions in the near term.”
The recent upturn of PP futures on China’s Dalian Commodity Exchange might lend support to the Vietnamese market, according to some players. “Higher futures might help PP prices maintain their current levels this week, however the near term PP outlook is still weak given muted demand amid comfortable supplies,” a seller opined.
A packaging converter noted, “We prefer to maintain our wait-and-see stance for the moment given the ongoing softening trend. The trade war between China and the US is creating uncertainty for the near term outlook.”