Vietnam PP & PE Markets Extend Slide as Buyers Resist Elevated Price Levels

Vietnam’s domestic polypropylene (PP) and polyethylene (PE) markets remained under pressure in June, continuing the downward trend that first emerged in April. Although local prices have retreated from the highs seen earlier in the quarter, they are still significantly above levels recorded before the Middle East conflict triggered a sharp rally. Current prices for HDPE film, LLDPE film, LDPE film, and homo-PP raffia remain notably elevated compared with pre-conflict levels, making these premiums increasingly difficult for the market to absorb.

Lower Replacement Costs Intensify Pressure

Beyond weak consumption, declining replacement costs have become a major factor driving the recent correction. Improving prospects for stability in key Middle Eastern shipping routes and reduced concerns over supply disruptions have steadily eroded the geopolitical premium that previously supported polymer prices.

At the same time, softer crude oil prices and weaker upstream feedstock markets have further weakened market sentiment. Competitive import availability has added another layer of pressure, with suppliers from China continuing to offer aggressively due to sluggish domestic demand and ample inventories. Additional competitively priced material from South Korea and the US has further increased supply options for Vietnamese buyers.

Domestic availability, particularly in the PP segment, remains comfortable, creating a more competitive environment and making it harder for local producers and traders to maintain previous price levels. Buyers, meanwhile, have largely delayed purchases or pushed for lower pricing in anticipation of further declines.

Cautious Buying Continues Despite Price Corrections

Demand conditions have shown little sign of recovery even after weeks of price reductions. Market participants continue to describe trading activity as subdued due to seasonal weakness, while expectations of additional declines have encouraged buyers to postpone replenishment.

Many converters and traders prefer to remain on the sidelines, believing the market has not yet reached its bottom. Although demand for finished products has remained relatively stable in some sectors, it has not been strong enough to support significant inventory rebuilding.

Market sentiment remains largely bearish, with participants indicating that current price levels still appear disconnected from actual downstream demand. As a result, recent price cuts have done little to restore buyer confidence.

Premiums Still Appear Vulnerable

Despite the recent correction, domestic PP and PE prices continue to trade well above levels seen before the conflict-related surge. Among major grades, LDPE still carries the highest premium, suggesting further adjustments may be possible if market fundamentals remain weak. HDPE, LLDPE, and homo-PP raffia prices also continue to hold substantial gains compared with pre-rally levels.

With replacement costs moving lower, import competition remaining strong, and buyers maintaining a cautious stance, Vietnam’s domestic PP and PE markets could face additional downward pressure before prices reach levels that encourage more active purchasing.

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