PVC import prices firming in SE Asia, trend yet to appear in China

18-Nov-11
Import PVC prices in Southeast Asia have firmed up over the past two weeks as prices at the lower end of the range have disappeared and producers have started to nominate their offers and sell ideas for December with increases from November, as per ChemOrbis. This trend has yet to appear in China as demand remains comparatively sluggish in the Chinese market and sellers have elected to delay their initial December offers until next week in hopes of seeing some improvement in demand. Import PVC prices on a CIF SEA basis have gained a noticeable premium over import PVC prices on a CFR China basis over the past two weeks, defying the normal trend in which PVC prices within the two regions trade close to par. Sellers in SE Asia report that they are feeling confident about the demand outlook for December and therefore believe that prices will rise in accordance with firmer energy costs. The recent explosion at Tosoh’s VCM plant in Japan, which has taken nearly 1 mln tpa of VCM capacity off-line, has prompted speculation that VCM and PVC supply might tighten in the coming month as most of the region’s PVC producers are non-integrated and several source the bulk of their VCM requirements from Tosoh. In contrast, players in the Chinese market complained that they have not seen any improvement in demand recently, with small and medium-sized converters in the country saying that they are operating at reduced rates of around 40-60% of capacity due to lackluster demand for their end products, as per ChemOrbis. Import PVC business for November settled with steep decreases from October and most late November deals were concluded well below the initial November sale prices. No firm indications have emerged regarding import PVC prices for December, but comparatively slower demand from the Chinese market may prevent sellers from attempting increases as large as the initial December price hikes nominated in the Southeast Asian market.
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