Asian PVC sustains uptick amid cautious demand

May PVC offers of a Taiwanese producer have emerged this week in the Chinese market with increases of US$20/ton over April deals, in line with the producer’s sell ideas reported last week, as per ChemOrbis. Higher spot VCM prices as well as production constraints have triggered the higher prices sought for May shipments by sellers. However, players in China remain cautious about this new round of price hikes, similar to this month. Even though demand was not great from China, sellers achieved higher prices for April as they had satisfactory sales particularly in Southeast Asia. A Chinese trader commented, “The activity in the import market is limited at the moment. As we are not seeing many inquiries from our customers, we prefer to keep low stocks and remain cautious for now.” The Chinese market has been witnessing sluggish PVC demand for some time given the depressed housing market. In recent news, housing prices fell in February in accordance with ongoing government efforts to tame the country’s property market. As a part of these efforts, China's economy in Q1-12 also grew by 8.1%, below economists' expectations of 8.4% and down from the 8.9% growth seen in Q4-11. Taiwanese PVC offers have been revealed higher to India as well with a trader offering this origin with a US$30/ton increase over his recent April offers. He sounded optimistic about achieving higher prices for May shipments, pointing to limited import availability. However, he remarked, “This may be the last month of increases as the monsoon season will start in June and the low season for many PVC applications will take effect.” Another trader told ChemOrbis, “Although PVC demand is currently steady in India, buyers prefer to source their needs from the local market, which provides prompt supply. Plus, the depreciating local currency against the US dollar is cutting the appetite for imports.” In Southeast Asia, the US$30/ton increase announcement of the Taiwanese producer has firmed the market sentiment back up after a slight softening witnessed last week. A trader offering this origin commented, “Sentiment is not as strong as it was for this month but we believe that May business will be settled higher owing to persistently tight availability.” Demand continues to be considered healthy in Indonesia and Malaysia while recent regional holidays in Thailand and Philippines have caused buying interest to slow down, as per ChemOrbis. The slowing construction sector in Vietnam has also resulted in sluggish demand for PVC, report players in the region.