PVC market: Unexpected slow down in India dampened firming sentiment

The Asian PVC market has been following the firming trend since Jan 2016 as healthy demand in the region biggest importer – India elevated the whole sentiment. This week, major Taiwanese producer announced May shipment prices with $30/t increased compared to last month to reach $830/t to China and Southeast Asia and at $880-90/t to India, all based on CIF LC AS term.

Weaker respond from India market surprised many regional players. An Indian trader informed, “There are large quantity of material arriving the main port easing local supply while the monsoon season might start in June. This has discouraged many traders from in-taking any cargoes this round. We heard that major Taiwanese producer only manage to sell 6500 tons to India, which is well below their target and they might need to extend the offer validity.” However, market does not expect any price reduction in the near term with an agent firmly said, “Any effort to attract buying interest by giving discount would spoil the whole sentiment. We do not think our principal would select this strategy.”

Meanwhile, Southeast Asian buyers are also receiving new offers from other producers with similar hike, yet sellers are reported to be more willing to negotiate. A Vietnamese buyer was offered Japanese PVC at $830/t CIF Vietnam commented, “We was surprised that our supplier is very open to negotiation this time, unlike the firm stance they held last month. We have purchased some cargoes after received some discounts and this has sparked some indication to us. Demand for our end product is regular at the moment.”

The fasting month is also around the corner and many buyers in Indonesia and Malaysia has taken this into consideration when making purchases.