Asia Weekly PVC Overview (Week 16, dated 17 - 21 April 2017)

In Asia, major Taiwanese producer announced fresh offers for May shipment to Asia with $80/ton reduction month on month basis amid persistent slow buying interest across the region. Initial respond from Indian buyers is rather positive, however, Southeast Asian buyers are still very much reluctant considering the available of competitive carbide based PVC cargoes. Most other suppliers have implemented similar price cut to the region this week.    

In fact, it is reported that the maker has completely sold out the initial allocation to India market just a day after the new price announcement and players are expecting additional quantity from the maker. A trader commented, “We heard the initial allocation to India market this month is about 22,000 tons. We are requesting for additional quantity since buyers are very active this month.” The source added that the supplier might lift the allocation to about 30,000-33,000 tons within this week. At the meantime, a major local producer in India matched to reduction in import ground, slashing domestic offers by another INR3000/ton ($45/ton) compared to earlier April, bringing latest offers to approximate $920-930/ton excluding VAT, EWX India term.

Despite such strong buying interest in India, regional buyers are fearing of a dejavu with a market source said, “Indian buyer might withdraw from the market again after replenishing sufficient quantity as it happened two months ago. Especially when the traditional off-peak season is just around the corner.”

Within Southeast Asia, offers for Chinese carbide based PVC continue to dip lower from the $800/ton threshold with Vietnamese buyers reported receiving at $750/ton CIF Vietnam, LC AS term. A pipe maker said, “We have purchased some quantity of carbide based PVC and currently looking for competitive ethylene based cargoes. New offers from Taiwanese major, though indicated $80/ton reduction month on month basis, it is till too far from our acceptance levels. We expect ethylene based PVC cargoes to reach $780-800/ton CIF Vietnam term in the coming weeks.”

In domestic China market, carbide based PVC offers plunged CNY300/ton ($44/ton) on an average to reach CNY5600-5800/ton ($695-720/ton without VAT), EXW China, cash term. Meanhile, ethylene based PVC dropped CNY200/ton ($29/ton) week on week basis. A producer said, “Our customers are coming back to make replenishment, though purchased quantity is still small. WE hope that the pick up in demand in India would prevent prices from falling any further in the near term.”

Chinese producers also expressed their firmer stance toward export offers, “However, Southeast Asian buyers are very aggressive in placing lower bid, and we concern that competitive carbide based material would give market additional pressure,” an ethylene based PVC maker said.