September PVC prices expected to rise in SE Asia’s domestic markets

31-Aug-10
In Southeast Asia, import PVC business for September is being settled with increases from August done deal level in accordance with developments in the Chinese and Indian markets, as per Chemorbis. Demand from both China and India has been strong over the past few weeks and Vietnamese producers who have already opened their books for the coming month say that they have concluded some export deals with customers in India. Traders in India state that demand slowed down a bit over the past week as a number of buyers withdrew from the market after meeting their immediate needs, although sellers report that they are still feeling optimistic about their prospects for the coming month, predicting that demand would pick up again over the coming weeks as the upcoming end of the monsoon season will entice additional buyers to return to the market to replenish their stocks. Players in the region expect to see stronger local prices for the coming month, with producers in Vietnam having initiated increases for their September business, announcing initial September offers to their local market with increases of US$50/ton when compared with August done deal levels. Producers comment that their new offers have not yet met with much interest from buyers, although a distributor has managed to conclude some deals for September with these increases. Players pointed to stronger upstream ethylene and VCM feedstock costs along with higher import prices as the main reasons for the price increases. While sellers in other regional markets have yet to announce September offer levels, increases similar to those in Vietnam are expected to be announced in most countries in the week ahead. An Indonesian producer expressed a sell idea for September with an increase of US$50/ton when compared with their August done deal levels. Although the producer acknowledged that the upcoming Ramadan holidays would likely result in lower month over month PVC consumption in Indonesia, prices are predicted to remain on a firming trend into the next month as some PVC shutdowns inside the country will limit availability in the local market. In Thailand, both producers and converters are forecasting that initial September price increases of THB1000-1500/ton (US$32-48/ton) will be announced in the coming week. Converters say that they plan to purchase a normal amount of material in the coming month, with a number of converters indicating that they are prepared to accept an increase of THB1000/ton on their September purchase prices, although other buyers said that they will try to negotiate for a rollover from their August done deal levels. While demand in Southeast Asia is expected to be negatively impacted by the upcoming Ramadan holidays in Indonesia and Malaysia, sellers in the region say that they are also anticipating healthy export business in the coming month.
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