Domestic PVC prices for March set to rise in Southeast Asia

Players in Southeast Asia’s domestic PVC markets expect to see another month of firmer prices in March as regional producers are beginning to express intentions of raising prices in March, as per Chemorbis. A producer in Vietnam has pioneered March PVC hikes to the region by lifting initial March offers by ten dollars on the high end of the range when compared with the past week. Producers pointed to escalating upstream costs, firming regional trends as well as their expectations of better demand in March along with the beginning of the high season for the construction industry. Demand has already picked up significantly across the region, although buyers are generally unwilling to purchase in large amounts these days as they find the prevailing offer levels to be quite high. Upstream, March offers for spot VCM cargoes on a CFR China basis have been announced with increases of US$50-60/ton from February done deal level. Should the full extent of these price increases pass, PVC producers in Southeast Asia would face significantly reduced margins as many producers voiced complaints of higher VCM costs eating into margins last month. Spot naphtha prices have also moved higher recently, with naphtha prices on a CFR Japan basis surpassing the US$900/ton threshold for the first time in over two years. Meanwhile, crude oil futures on the NYMEX jumped by over US$7/barrel between Friday and Tuesday as traders bid up prices on concerns that the current political turmoil in Libya could depress crude oil exports from that country and thereby reduce global supply levels. In addition to the higher March prices announced by a Vietnamese producer this week, a Malaysian producer also lifted offers to the local market by MYR150/ton (US$49/ton) on the week, with the producer attributing the price increase to stronger import offer levels. In Indonesia, a producer who reported conclusion of most February business at prices close to their initial offer levels for the month expressed March sell ideas with increases of US$50/ton when compared with their February done deal levels. A producer in Thailand also expressed their March sell ideas with increases of THB1500-2000/ton (US$49-65/ton) from February done deal levels. In India, a converter reported purchasing some domestic material this week in order to top up their stocks, saying that they elected to purchase some additional material this month as they expect to see additional increases in the month ahead. Domestic producers announced price increases of INR2000/ton (US$44/ton) on their offers to the local market last week.
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