PVC sellers in Asia report higher sale prices, better demand for August

03-Aug-10
PVC prices continued to firm up over the past week in Asia, with major regional producers claiming to have concluded their August business with increases from July at levels similar to their initial offers, as per Chemorbis. Offers for domestic material have also been gaining in the region due to higher import prices and reduced availability from some sources. Higher electricity prices inside China have pressured domestic PVC producers to maintain lower operating rates, thereby encouraging Chinese buyers to source more of their needs from the import market. Higher PVC prices from American producers have also helped push up demand for Asian origins. Major Asian producers report that they have concluded August business to the Chinese market at prices US$10-40/ton higher than their July done deal levels. Producers reported that their August allocations to China were regular and that they had no difficulties selling out their allocations to the country. Producers added that they are expecting to see higher prices continue into the next month as they expect similar supply/demand dynamics to be present for September. Higher import prices along with stronger demand have also made an impact on China’s domestic market, with producers and distributors beginning the week with increases of CNY50-100/ton ($7-15/ton) on their offers to the local market. Firmer demand from the Chinese market has led producers in Southeast Asia to focus much of their sales efforts to China, while also encouraging them to raise their offers to buyers within Southeast Asia. A Thai producer announced their August offers to the region last week with an increase of $50/ton from their July done deal levels, citing stronger buying interest from the Chinese market along with firmer upstream costs as the reasons for their price hike. Local prices in the region have followed a similar trajectory, with offers for domestic material in Vietnam and Malaysia posting increases of around $5-30/ton over the past week while Thai and Indonesian producers expressed their sell ideas for August at prices approximately $30/ton above their July done deal levels. A Vietnamese producer said that they have already concluded a few deals at their new offer levels as buyers have become more active in their price inquiries, even though many converters are still unwilling to purchase in large quantities. In India, done deal levels for August have also been reported with increases from July. Over the past weeks, import offers to the Indian market have posted increases of US$50-60/ton, with sellers reporting that demand is significantly better when compared with the prior month. Following two consecutive weeks of firming import prices, distributors report that domestic producers have reacted by raising their offers to the local market by INR3000/ton (US$64/ton).
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