Will PVC increases in August come off in Asia?

Asian market players have fortified themselves for increased PVC offers from major Asian producers for August, as apparent with initial increases for August in local offers in Southeast Asia and import prices to India. As per Chemorbis, some players are skeptical of the feasibility of the PVC increases, pointing to weaker demand and lower PVC prices in China’s local market amid slower seasonal demand in India and Southeast Asia owing to the monsoon season. Although major Asian producers concluded July business to China with decreases of US$100/ton from June done deal levels, sellers reported feeling optimistic about their prospects for August. Producers’ July sales volumes were considerably higher than June, as converters had reduced purchases in May and June and therefore needed to purchase more material for July to make up the difference. Distributor sales volume rose 60% between June and July. Towards the end of the July, several producers announced price increases of US$20-30/ton on late July offer levels, that eventually met with acceptance from buyers. After concluding their July business on a bullish note, sellers have been predicting further price increases for August business. In accordance with this expectation, players in India report that they have received initial August offers from Asian producers with increases of US$15-30/ton from the late July done deal levels. Indian converters have yet to accept these new price levels, commenting that demand for their end products is not doing well owing to the monsoon season. Buyers added that they do not find the new import prices to be competitive when compared with the prevailing offer levels in the local market. A few Southeast Asian producers have also pioneered price increases for August to local markets. A producer in Vietnam announced initial August offers with increases of US$10/ton from July done deal levels, even as new offers encounter stiff resistance from buyers leading to lack of deal conclusion. Meanwhile, a Malaysian producer has concluded some deals with large buyers at prices MYR50/ton (US$16/ton) higher than their early week offer levels. Several PVC shutdowns in the region have offered justification for their price increases. In the import market, a Thai producer expressed August sell ideas at prices US$20-30/ton above their July done deal levels, adding that they have a good number of price inquiries and that they have received bids at prices only US$10/ton below their current sell ideas. In China, players are still waiting to receive August import offers from major Asian producers, although an offer for American PVC for September shipment surfaced this week at prices US$30-40/ton higher than the most recent done deal levels for American materials. Traders commented that higher offers for American material combined with softening domestic prices will result in a smaller volume of American PVC imports next month. Lower prices for domestic PVC have been attributed to the ongoing slowdown in China’s economic growth, with the real estate sector in particular being subjected to government policies aimed to prevent the formation of a property bubble in the country. This has resulted in weaker demand for PVC across the country, with converters commenting that they are generally operating their plants at low rates of around 40-60% of capacity. In addition, the recent flooding in South China has led some players to predict a drop-off in construction activity in the affected regions.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha