by Abdul Hadhi – email@example.comIn a move that will tighten PP supply in Vietnam, Nghi Son Refinery and Petrochemical (NSRP) has stopped making offers ahead of the maintenance at its PP plant, traders reported.
“Nghi Son will shutdown on October 20 till end of November. So, they don’t offer any material at this moment,” a regional trader said. NSPR operates a 400,000 tons/year PP plant at Thanh Hoa – about 200 km from the capital Hanoi – which will be shut for maintenance for 50 days.
Vietnam has been a bright spot for regional PP markets with increasing demand ahead of the high season compared to weakness in other markets on ample supply and spillover sentiment from the subdued mood in China.
In addition to buying to avoid even higher prices later in the aftermath of the Saudi attacks, the strong purchasing activity in Vietnam was also due to the approaching high season. Reflecting the sentiment, a source at a converter said, “The seller expects prices will go up because of better year end demand, and asked to order more now”.
The high season traditionally starts in end-October and goes on until the holiday-filled December month. Downstream requirements tend pick up to cater to the year-end holiday season demand for gifts and other bigger personal purchases. PP is used in the packaging of consumer products as well as making plastics parts for industries ranging from cars to textiles.
Prices take a break after recent gains
Domestic and import prices gained from mid-September, along with other petrochemical products, when the attacks on Saudi Aramco cut the kingdom’s oil and ethane supplies by half and feedstock prices surged on shortages.
Domestic prices of PPH raffia gained around 3% from September 9 to October 7 to while import prices rose as much as 7% during the period.
Prices were more subdued recently as inventory build-up in past weeks made supply ample. Adding to the supply, a Thai producer with high inventory and facing weak demand in the home country, is making very competitive offers to Vietnamese buyers, traders reported.
Players also attributed the market quietness to a wait-and-see attitude ahead of fresh Saudi offers amid expectations of rollovers or lower prices before committing to purchases.
Another factor that could temper upside for prices during the high season could be the expected new capacity coming up with Hyosung due to the start-up of its 300,000 tons per year PP plant in Vietnam in the fourth quarter.