15 November 2013 08:42 [Source: ICIS news]
SINGAPORE (ICIS)--The import and domestic prices of polypropylene (PP) in Vietnam are diverging, as the former fell on weak demand, and the latter rose on reduced local supply and strong demand for prompt delivery, industry sources said on Friday.
Demand for imported cargoes was weak because many importers were not interested to hold high inventories before the week-long Tet holiday in the country in end January, local traders said.
Cargoes booked for November and December shipment would only arrive in December and January, they said.
Vietnamese importers were particularly unwilling to hold inventories because a 1% import duty would be imposed on PP imports from January, one of the local traders said.
In response to the weak import demand, an Asian producer dropped its price offer for PP flat yarn grades to $1,520/tonne (€1,125/tonne) CFR (cost & freight) Vietnam for November shipment, $5/tonne lower from the price it offered last week, local traders said.
The domestic prices of PP flat yarn grades rose on strong buying interest in locally produced and imported cargoes offered by local stockists for delivery within November, the local traders said.
Demand for prompt delivery was strong because downstream plastics processors had started ramping up production in preparation for the high consumption before and during the Tet holiday, they said.
The domestic prices of locally produced and imported PP flat yarn grades were at Vietnamese dong (D) 36,600-36,700/kg ($1,735-1,740/tonne) DEL (delivered) this week, up D100/kg from last week, local traders said.
Domestic PP prices rose also because local producer Binh Son Refining and Petrochemical shut its 150,000 tonne/year PP plant at Dung Quat in central Vietnam on 7 November as a result of heavy rains, local traders said.
Binh Son Refining and Petrochemical restarted its PP plant on 10 November but the producer had cut allocations to its distributors this week as result of the brief outage, one of the traders said.
Binh Son Refining and Petrochemical was not immediately available for comment.
($1 = €0.74 / $1 = D21,095)
Additional reporting by Angeline Soh
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