Asia Weekly PVC Overview (Week 18, dated 1 - 5 May 2017)

Limited trading activities due to holidays, Chinese carbide based maker continue holding firm stance

In Asia, there are very limited trading activities this week due to the long weekend and Labor Day holiday. At the meantime, most carbide based PVC makers from China continue to hold firmer stance on their cargoes, claiming limited margins available. Regional buyers are mostly expecting medium scale of price reduction for June shipment on ethylene based PVC, especially with energy complex softened several weeks in a row.

Indian players reported receiving new offers for Chinese carbide based PVC with marginally increase week on week basis at $864/ton CIF India, LC AS term, excluding approximate $91/ton antidumping duties. “The hike is mainly due to higher shipping costs. We are not seeing strong buying interest at this levels as domestic material remain competitive this week. We hold firm on expectation that import offers would continue to drop for June shipment.”

Similar expectation is reported in Southeast Asia market and in fact, regional buyers were informed about a possibility of further discount to emerge in the coming weeks, especially on ethylene based PVC. In contrast, carbide based PVC is seeing more of stabilising trend after plunging to multi year low levels. Several deals for this grade are reported at $760/ton CIF Vietnam, LC AS term this week. A buyer in this market said, “It appears that firming ethylene costs are not providing sufficient support to the market. Domestic material remains at VND20,100,000/ton ($884/ton) without VAT, FD Vietnam, LC AS term. Hence, international suppliers might find it hard to attract buying interest here if there is no discount available.”

Couple of Southeast Asian producers also shared similar view regarding the near term outlook pointing to persistent weak demand across the region. “We do not find much support for a firmer trend within this month. Market is just too sluggish,” a producer said.

A positive sign obtained from local China market is the continuous firming up of domestic offers for both carbide based and ethylene based PVC. With the firmer trend stay in place for two weeks in a row, which accounted for a total increase of CNY150-200/ton ($22-29/ton), carbide based PVC below the CNY5600/ton ($695/ton without VAT) mark is no longer available this week. A producer commented, “Demand however has not shown any improvement, which is rather disappointed. We are waiting for fresh offers from international suppliers for June shipment before deciding on our next move.” Chinese players believed that local prices have reached the bottom, yet room for any significant hike is rather limited, especially with soft international market at the background

Major Taiwanese producer might announce fresh offers earlier than usual this month due to the ChinaPlast and the beginning of the fasting month at mid to late May.