Weekly PVC Overview - Week 35 – 2018

Regional PVC market remains lethargic, USA cargoes continue dominating SEA region  

In Asia, players have mostly settled the September business, leading to a calmer sentiment this week. Market appears needing more time to materialise any major upswing as demand in India and China shows little improvement amid the heavy monsoon season. Sources are not expecting any major changes in the near-term outlook, considering the current demand-supply condition.

In India, players adopted a more conservative stance after replenishing comfortable stock in the past week. “The effect of the current exchange is still there, however, the condition should be better in the coming weeks as the monsoon subsides,” a local trader commented.   

In China, the domestic market continues to soften as a result of a deep reduction in futures trading. Carbide-based cargoes see another CNY100/ton ($16/ton) reduction from late last week to CNY7050-7150/ton ($890-902/ton without VAT) while ethylene-based PVC plunged up to CNY300/ton ($44/ton) to CNY7300-7500/ton ($921-947/ton without VAT), all based on EXW China, cash equivalent. “A good thing is that buyers are still replenishing as prices drop, just that the purchased quantity is not very large,” a trader said.

There have been reports that total PVC inventories in local China reduced 5.8% week-on-week, reflecting the mediocre transaction. Yet, pipe maker in the country continues to ramp up production rate, raising confidence among sellers that demand would continue to improve in the near term.   

Southeast Asian buyers reported receiving cargoes originated from the USA at as low as $850/ton CIF level, yet, buying interest is not very strong. “The shipping time is too long and it is subjected to import duties, making it less competitive. Local demand is a little softer due to the typhoon season in the Northern and Central region,” a Vietnamese buyer said.

Meanwhile, a major local supplier in Indonesia is offering very competitive prices to medium to large-scale buyers after facing stiff resistance in the export market. “Overseas sellers just can’t compete at the moment. The only issue we are facing is the new trucking regulations that affect delivery,” said, a buyer received offers at $950-960/ton FD Indonesia, cash equivalent for 500 tons quantity.