- During Q2 2020, local and import PET Bottle offers moved in different directions
- Domestic demand for PET resins showed mixed performance throughout Q2
- Players foresee negative outlook for PET demand, followed by prices
During Q2 2020, SSESSMENTS.COM’s data showed that local and import offers for PET Bottle cargoes in the Vietnam market were captured on distinct movements. In April, local PET Bottle offers in USD-denomination increased between $15-20/ton. Whereas in local currency, the offers for local PET Bottle cargoes were stable to decrease between VND200,000-500,000/ton ($8-21/ton). In the import market, offers for PET Bottle of China origin experienced ups and downs during April. The biggest adjustment noted in the first half of the month; the offers were increased by $20/ton and then decreased by the same amount. Likewise, import offers for PET Bottle of Thailand and Indonesia origins were also adjusted in a diverse movement during April, with the most notable adjustment seen in early April, both cargoes were lowered by $35/ton. From other origins, import offers for South Korean and Taiwanese PET Bottle were generally increased between $10-20/ton. All on week-on-week comparison. During the month of April, some deals for local and import cargoes were closed at and below the initial offer levels.
Moving to May, precisely in early of the month, local PET Bottle offers mostly surfaced with a downward adjustment of between VND200,000-1,000,000/ton ($8-43/ton) due to lacklustre demand. Likewise, local PET Bottle offers in USD-Denomination were captured at $15/ton lower. However, on the week starting May 18, local offers were able to increase againbetween VND300,000-800,000/ton ($13-34/ton) in-line with better demand. All on a weekly comparison. In the import market, import PET offers of China origin were hiked between $5-15/ton week over week, in the first half of May but remained stable in the second half of the month. Meanwhile, import PET offers of Thailand and Indonesia origin were stable for three consecutive weeks, but increased by $20/ton and $10-20/ton, respectively, in the last week of May. In the month of May, a recently start-up Vietnamese PET producer was offering PET Bottle offers to the export market at $640-690/ton on LC at sight, FOB Ho Chi Minh basis. However, the customers who received the offers were not confident in taking the cargoes since most of them were unsure of its quality, SSESSMENTS.COM was told.
In the end of Q2 2020, SSESSMENTS.COM noted that local PET prices in Vietnam were only adjusted at the beginning of the month and the movements were in contrast. Some traders offered at VND300,000/ton ($13/ton) higher, while a PET producer in the country reduced the offers by VND600,000/ton ($26/ton) in order to maintain competitiveness. For the remaining of the month, there were no price changes noted in the Vietnam market. All on month-on-month comparison. In the import market, the overall PET Bottle cargoes of China, Indonesia, Thailand and South Korea experienced an upward price adjustment of between $5-30/ton during June. In the final week of the month, Chinese PET Bottle cargoes emerged at the lowest level compared to other origins, at $700/ton on LC at sight, CIF Vietnam main port basis. Yet, no deals were concluded.
Demand-wise, SSESSMENTS.COM noted that the overall PET demand in Vietnam was slow during Q2 2020 despite some improvement observed in some particular weeks. In April, demand was weakened by the 15-day partial lockdown in the country in early of the month. However, a slight improvement was observed in late April as the social distancing order loosen up and some customers start procurement activities again. Strolling to May, the demand conditions were the same as April. Vietnam PET market was bearish and showed no improvement in the first half of May although the social isolation guidelines have been lifted since April 22, with the exception for some high-risk areas. Fortunately, on the week starting May 18, domestic demand started to improve as crude oil prices have been rallying significantly. In the end of the quarter, demand for PET Bottle resins in Vietnam reported subdued on the back of several factors such as slow tourism industry, the rainy season and sufficient inventory on converters’ hand.
On the production front, SSESSMENTS.COM was told that most Vietnamese converters were still running the production at a reduced rate of between 50-70% during Q2 2020. Similarly, as reported on the week commencing May 11, Vietnam’s Paihong Co., Ltd reportedly still is not operating at full production rate, only at 60% from the normal capacity. A source with knowledge of the matter said the producer has yet to grasp market share as the company is a newcomer. Meanwhile, the parent company has minimal experience in producing PET bottle resins, therefore, stability in production is expected to take time. On the supply side, no significant issues reported during Q2 2020.
Looking into Q3 2020, the majority of Vietnamese market players believe that demand for PET Bottle resins would soften following the traditional pattern. In terms of prices, players expressed opinion to SSESSMENTS.COM that PET Bottle prices will likely to move in tune with demand.
Transactions for local/localized PET Bottle in April on cash, FD Vietnam basis (including 10% VAT in VND term and excluding VAT in USD term)
| Origin | Transaction Type | Currency | Offers/ton | Equivalent in USD/ton |
|---|
| Vietnam | Offer Given | USD | 750 | - |
| Vietnam | Sold | USD | 750 | - |
| Vietnam | Buy Idea | VND | 20,000,000 | 781 |
| Vietnam | Offer Received | VND | 20,300,000 | 792 |
| Vietnam | Purchased | VND | 19,000,000-20,500,000 | 742-800 |
| Vietnam | Offer Received | VND | 23,000,000 | 898 |
Transactions for import PET Bottle in April on LC at sight, CIF Vietnam Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| China | Bid Received | 650 |
| China | Offer Given | 675-730 |
| China | Offer Received | 650 |
| China | Sell Idea | 700-705 |
| China | Sold | 660-728 |
| Indonesia | Offer Given | 730-765 |
| Indonesia | Sold | 720 |
| South Korea | Offer Given | 740 |
| Taiwan | Offer Given | 710 |
| Taiwan | Offer Received | 680-690 |
| Taiwan | Sold | 700 |
| Thailand | Offer Given | 720-765 |
| Thailand | Sold | 720-750 |
Transactions for local PET Bottle in May, FD Vietnam basis (including 10% VAT in VND term and excluding VAT in USD term)
| Origin | Transaction Type | Currency | Offers/ton | Equivalent in USD/ton | Payment Term |
|---|
| Vietnam | Offer Received | USD | 720-740 | - | Cash In Advance |
| Vietnam | Buy Idea | VND | 18,800,000 | 734 | Cash In Advance |
| Vietnam | Offer Given | VND | 19,400,000 | 757 | Cash In Advance |
| Vietnam | Offer Received | VND | 18,300,000-19,500,000 | 714-761 | Cash In Advance |
| Vietnam | Purchased | VND | 18,200,000-18,800,000 | 710-734 | Cash In Advance |
| Vietnam | Purchased | VND | 18,400,000 | 718 | 15 Days Credit Term |
Transactions for import PET Bottle in May on LC at sight, CIF Vietnam Main Port basis
| Origin | Transaction Type | Offers (USD/ton) | Payment Term |
|---|
| China | Offer Given | 700-730 | LC at sight |
| China | Offer Received | 665-735 | LC at sight |
| China | Purchased | 685 | TT |
| Far East Asia | Bid Received | 690 | LC at sight |
| Far East Asia | Offer Given | 670-760 | LC at sight |
| Far East Asia | Offer Received | 670-750 | LC at sight |
| Far East Asia | Sell Idea | 680-690 | LC at sight |
| Far East Asia | Sold | 660 | LC at sight |
| Southeast Asia | Offer Given | 700-750 | LC at sight |
| Southeast Asia | Offer Received | 710-760 | LC at sight |
Transactions for export PET Bottle in May on LC at sight, FOB Vietnam basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| Vietnam | Offer Given | 640 |
Transactions for local/localized PET Bottle in June on cash, FD/EXW Vietnam basis (including 10% VAT in VND term and excluding VAT in USD term)
| Origin | Transaction | Currency | Offers/ton | Equivalent in USD/ton | Delivery Term |
|---|
| China | Offer Received | USD | 650-700 | - | EXW |
| Vietnam | Bid Given | VND | 18,500,000 | 722 | FD |
| Vietnam | Buy Idea | VND | 18,800,000 | 734 | FD |
| Vietnam | Offer Given | USD | 705-720 | - | EXW |
| Vietnam | Offer Given | USD | 715-720 | - | FD |
| Vietnam | Offer Given | VND | 18,000,000-18,800,000 | 703-734 | FD |
| Vietnam | Offer Received | USD | 710 | - | EXW |
| Vietnam | Offer Received | USD | 735-740 | - | FD |
| Vietnam | Offer Received | VND | 18,700,000-19,200,000 | 730-749 | FD |
| Vietnam | Purchased | USD | 770 | - | EXW |
| Vietnam | Purchased | VND | 18,700,000-18,800,000 | 730-734 | FD |
Transactions for import PET Bottle in June on LC at sight, CIF Vietnam Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| China | Offer Given | 700-735 |
| China | Offer Received | 730-735 |
| China | Sold | 710 |
| Indonesia | Offer Given | 725-730 |
| Indonesia | Offer Received | 725-765 |
| South Korea | Offer Given | 740 |
| Taiwan | Offer Given | 760 |
| Thailand | Offer Given | 725-740 |
| Thailand | Offer Received | 725-765 |
Tags: Asia Pacific,English,PET,Quarterly,SEA,Vietnam
Published on July 9, 2020 5:52 PM (GMT+8)
Last Updated on July 9, 2020 5:52 PM (GMT+8)
