Domestic PVC markets firm up in Southeast Asia

At the onset of December, new PVC offers and sell ideas start to emerge with increases in Southeast Asia's domestic markets, as per ChemOrbis. Regional producers have either issued price hikes or expressed hike targets for the new month, citing VCM shortage in the region as the main reason, amid support from relatively better demand for their targets. Most Southeast Asian PVC producers are known to be non-integrated and have to procure their VCM supply from other sources. Many regional PVC makers expect to see higher upstream costs in December mainly due to limited supplies stemming from the disruption at Tosoh’s complex. Earlier in November, Japanese Tosoh shut its 550,000 tpa No. 2 VCM plant after an explosion and decided to shut its No. 3 plant with a capacity of 400,000 tpa as a precaution. The company’s No. 1 plant with 260,000 tpa capacity was already down for maintenance since the middle of October. The company has not announced a planned restart date for its plants although it may reportedly take around six months to resume normal operations at its No 2 VCM plant, while damage to its No 3 plant was thought be less severe. This week, an Indonesian PVC producer expressed December sell idea with US$50-70/ton increases compared to November done deals after wrapping up their business for this month. The producer cited healthy demand in the local market as well as higher expected VMC costs in December as the main reasons behind their hikes. Another Indonesian producer reported concluding November sales amidst satisfying demand. A Philippine PVC producer reported plans to increase offers for their December allocations due to insufficient inventories as they are unable to procure feedstock from their parent company. In Malaysia, a producer increased PVC offers by US$63-79/ton citing higher feedstock costs. The producer commented that demand is slightly better, however buyers are quite shocked with the recent hikes. A Thai producer plans to increase PVC prices by US$32-64/ton for their December allocations amidst better demand. Meanwhile, a Vietnamese producer elected to maintain local offers after issuing an increase last week. The sentiment in the local market has improved as buyers are concerned about possible increases although actual demand is not really picking up much nowadays, according to the producer. They are skeptical about the sustainability of the firming trend as demand is not very strong since buyers are not in need of material and sentiment is not so strong in China. “We could achieve sales with our regular customers while we are currently focusing on our local sales considering the higher margins we obtain,” the producer noted.