By Malini Hariharan
Its not just China and India that have posted healthy demand numbers for last year.
Vietnam maintained double-digit growth in polyethylene (PE) and polypropylene (PP) last year, driven mainly by the local food packaging sector, reports ICIS pricing editor Bee Lin. PE consumption increased 27% to 800,000 tonnes while PP demand was up 14% at 650,000 tonnes.
Pic source: toursvietnam.net
These figures do not account for volumes that were re-exported especially in second half of 2010 when Vietnam faced a shortage of US dollars. Import activity also declined during this period.
The official exchange rate was pegged at Vietnamese dong (D) 19,500 to one US dollar for most of last year, but it was very difficult to obtain US dollars at the local banks, said local traders.
US currency was available in the black market, but at a much higher rate (more than D22,000), and that had made imports too costly for local companies, they added.
A local industry source estimated that Vietnam exported around 12,000 tonnes of PP last year.
Vietnam's first PP plant of 150,000 tonnes/year, part of the Dung Quat refinery, started operations last year. But the plant produced only around 50,000 tonnes in 2010.
In Indonesia, PE demand for 2010 was estimated at 750,000 tonnes, up 6% from the previous year, while PP grew by 8% to 850,000 tonnes. Food packaging was again a key driver.
Indonesian PE imports were expected to grow as domestic capacity was only around 750,000 tonnes/year. But PP production volumes were likely to increase from last year's 520,000 tonnes as Tripolyta planned to raise its capacity by 120,000 tonnes to 480,000 tonnes/year.