Local PP prices extend uptrend in Vietnam despite limited demand

Vietnam’s local homo-PP market has continued to witness increases, with suppliers preserving their firm stance although buying activities in the post-Tet holiday period remain limited.

Local homo-PP market hits 2-month high

According to the weekly average data obtained from ChemOrbis Price Index, local homo-PP prices in Vietnam have hit their highest levels since late December 2018 after following a mostly firmer trend for more than a month.

As can be seen in the graph above, the local homo-PP market spent the most part of the fourth quarter of 2018 on a bearish note and displayed a recovery by early 2019.

A few buyers commented, “Local homo-PP prices gained further ground after the end of the holiday. We are not interested in making any purchases for now as our inventories are quite high while demand is low. We are also following up the developments in China’s PP market.We think prices will continue to post slight increases in the days ahead.” 

Import homo-PP market faces hike attempts as well

In addition to the local homo-PP prices, Vietnam’s import homo-PP market has also faced hike attempts despite weak interest.

What drives PP prices higher?

The recovery in place since the beginning of the year was partially attributed to the bullish run in the energy complex during last week along with the optimism generated by the trade talks with the US.

Will the firming in PP be sustained?

PP players are keeping a close eye on the upstream chain. ChemOrbis Price Wizard suggests that both WTI and Brent crude oil futures were traded at their highest levels since mid-November 2018 over the past week. However, both global oil benchmarks had a weak start to the last week of February and retreated slightly.

Spot propylene prices have also softened somewhat after reaching a two-month high in the second half of January.