Would scheduled import duties increase boost PP demand in Vietnam?

Earlier this week, Vietnamese players resumed operation to find out the latest Decree from government informing of an increase in import duties for homo-PP to the country starting 1 January 2017. An additional of 2 percent from the current duties initially triggered market expectation that buyers here would take position before the implementation of new import duties rate. However, not all buyers are showing such willingness. 

A trader said, “Domestic market is very slow at the moment and we have yet to plan for large purchases as it is really risky. We need to monitor further movement before forming any concrete decision.”

Meanwhile, it is heard that international sellers are surveying market acceptance with offers to only selective customers. Indeed, a buyer in Northern Vietnam market reported receiving Saudi Arabia homo-PP offers at $1025/ton CIF, LC AS term said, “We do plan to replenish cargoes before import duty hike, however at the price level of $1000/ton would be more preferable. Domestic market still face difficulties to move up.” 

Another converter added, “We would buy in large quantity if prices stand at $1000/ton for Middle East cargoes. Our end product demand is regular and might pick up in the near term. We already stock up sufficient inventories till November, yet avoiding the import duties hike could be a big saving for us.”

Opinions on whether to restock are diverged at the moment; however, one thing clear is that no one is expecting lower prices in the near term considering firm feedstock costs and expected better demand across the Asia region. 

Import homo-PP to Vietnam currently stand at $‎1010-1025/ton CIF Vietnam, LC AS term.