Thailand draws LDPE re-exports from Vietnam on tight supply

02 August 2013 06:25  [Source: ICIS news]

SINGAPORE (ICIS)--Thailand’s strong domestic low density polyethylene (LDPE) prices amid tight domestic supply has drawn arbitrage shipments from Vietnam, industry sources said on Friday.

The Vietnam-Thailand arbitrage is unusual because Thailand is a net exporter of LDPE, the sources said.

Saudi and Chinese LDPE film grades were re-exported from Vietnam at $1,580/tonne (€1,201/tonne) CFR Thailand this week, regional traders said.

Locally produced LDPE film grades were sold at Thai baht (Bt) 53/kg DEL (delivered) early this week, yielding an import parity of $1,580/tonne CFR (cost and freight) Thailand for dutiable product, local traders said.

Offers for locally produced LDPE film grades on Friday rose to Bt54/kg DEL, which yields an import parity of about $1,610/tonne CFR Thailand for dutiable product, they said.

LDPE supply in southeast Asia tightened following a recent outage at PTT Global Chemical’s plant in Thailand, and would fall further going forward because of a scheduled maintenance at Petlin’s plant in Malaysia, regional traders said. 

LDPE re-exports from Vietnam are likely to dwindle shortly even if the arbitrage window stays open on paper over the next few months, as supply in Vietnam is expected to fall as regional supply tightens, the regional traders said.

Vietnam has no local LDPE production and is a net importer of this resin.

($1 = €0.76)

By: Chow Bee Lin
+65 6780 4359

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