The latest government subsidies targeted at the household appliances sector have failed to uplift market confidence. Instead, key LLDPE contracts on the Dalian Commodity Exchange extended their decline for the second session this week, further eroding confidence in the near-term outlook.
While the number of transactions for LLDPE on the Shenhua Auction Platform showed a slight improvement compared to the previous day, the overall deals for all grades have deteriorated significantly. This decline is a direct consequence of the continued fall in futures contracts on the Dalian Commodity Exchange.
However, this optimistic local outlook belies the broader challenges facing the PVC market. The international PVC landscape remains weak, largely due to an influx of competitively priced Chinese materials and the seasonal demand lull.
The fear of significant delays in both local deliveries and import arrivals has driven Indonesian customers back to the market this week, sparking increased trading activity. However, it is noteworthy that even in the distribution market, ready stock cargoes are scarce, with the majority of available offers being for forward-selling.