April PVC outlook firm in South East Asia’s local markets

26-Mar-12
After April import prices were announced higher to the region, players in Southeast Asia’s PVC market expect to see additional price increases announcements on local prices next month, as per ChemOrbis. VCM feedstock availability remains tight while regional demand is said to be healthy. Firm upstream costs were also cited as a factor contributing to widespread expectations of higher local PVC prices in April. After achieving increases in excess of their initial hike targets for March, Indonesian producers plan to seek further increases for April. A source at an Indonesian producer who has already sold out their March allocations reported, “We are planning to announce further price increases for April as demand remains healthy and VCM availability is still tight. We have not had any problems sourcing enough VCM to cover our needs but we have heard that some other domestic producers are suffering from VCM shortages.” Tight VCM availability and higher VCM prices are bringing considerable pressure upon PVC prices in Southeast Asia as most of the region’s producers are not integrated and source their VCM from the spot market. Malaysian producers also report mulling an increase in prices in response to firmer production costs and squeezed margins. “We raised our prices this week as feedstock costs have continued to move higher and we are feeling some margin pressure,” a source from a Malaysian producer told ChemOrbis. In Thailand, converters reported that they are beginning to receive firmer prices from the local market ahead of the start of the new month. “The offers we received last week are higher than the offers we received earlier in March. Demand for our end products is regular these days but we are not in a hurry to purchase as we are satisfied with our stock levels,” a PVC compounder in Thailand reported. Players in Vietnam are also bracing for another round of price increases in the coming month. “Even though demand remains sluggish, we are planning to raise our April prices in accordance with higher costs,” reported a source from a Vietnamese producer. A converter manufacturing PVC pipe also reported that they expect to see higher prices in the coming month. “We managed to secure some domestic material at attractive prices last week. We purchased a larger than usual amount of material as we expect to see higher prices in April,” the buyer commented. Another Vietnamese converter manufacturing PVC pipes added, “We purchased some cargoes last week as we expect to see higher prices at the start of April.” Buyers in the Philippines also moved to secure some additional stocks this week in anticipation of seeing higher April prices from domestic producers. “We purchased some domestic material last week in accordance with our immediate needs. We are seeing solid demand for our end products these days and we believe that domestic producers will seek some additional increases on their initial April prices,” commented a converter in the Philippines.
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