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Regional sentiment remains sluggish; April outlook seems softening

In Asia, most transactions for March shipment has been done and market is now waiting for April price announcement. It appears that the major Taiwanese producer has been facing difficulty in depleting March shipment allocation, which stir expectation that new offers might drop.

In fact, Indian customers have just received price protection scheme from a major local producer, which is used as a tool to stimulate demand amid fear of price reduction. “Overseas sellers therefore, would have to lower prices for April and we are gauging the extent. Demand is not strong here due to the upcoming election,” a trader commented.

It is heard that both Russian and Ukraine suppliers have stepped back on import PVC offers to India to $890-920/ton CIF term to entice purchasing interest.

Meanwhile, there is little movement in Southeast Asia market and despite claims of tight availability among regional suppliers, buyers managed to obtain Chinese carbide-based PVC cargoes at relatively competitive prices. “We make some purchases for carbide-based cargoes at $820/ton CIF Vietnam. Most of the suppliers have reduced prices for March shipment,” a pipe maker informed.

Sources are expecting softer demand in Indonesia and Thailand due to the General election in these countries and also the Songkran festival in Thailand in April.

Following the stronger futures trading, sentiment in local China market shows some improvements with spot offers for both ethylene-base and carbide-based cargoes inched CNY50-100/ton ($7-15/ton) higher from last week. News on the government plans to cut VAT rate for the manufacturing sector by 3% from the current rate of 16% has fuelled the positive expectation, though there are no details on the implementation date.

“Converters are gradually ramping up operation rate. This is a good sign. We are waiting for overseas suppliers to announce new prices, however, we are not too pessimistic,” a local producer said. 

In related Plant Status news, Indonesia’s Asahimas is planning to take one of its PVC lines off-stream by mid of March for a month. The line is designed to produce 250,000 tons/year.

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