Higher September PVC offers revealed in Asia

18-Aug-10

Confirming players’ earlier price ideas, new September offers are being announced with increases to China for the week, mainly on good demand from India. As per Chemorbis, a major Taiwanese producer is seeking US$30/ton increases from August offer levels, while the producer’s new offer levels stand US$40-50/ton above their most recent done concluded for August. The producer is confident of acceptance from buyers. The producer also pointed to widespread electricity cuts inside China due to government’s efforts to meet emission reduction targets for plants performing in polluting and energy-intensive industries. As a part of these efforts, the government is also likely to introduce further increases in electricity costs. All of these developments are expected to result in limited supplies inside the country, particularly for acetylene based PVC. Accordingly, a source at the Taiwanese producer believes that even though the market may slow down in September due to China’s National Day holiday, they can still achieve satisfactory sales for the coming month. Prior to the start of the announcement of new PVC offers to China, higher import prices had already been announced to the Indian market. Producers from South Korea and Taiwan announced price hikes of US$100-110/ton to India on robust buying interest. Demand has picked up in India, report several sellers, as buyers have returned to the market to replenish their stocks amidst insufficient local availability. Nevertheless, these increases in import prices have dampened converters’ buying interest as buyers complain that the current offers are too high to accept. Buyers prefer to continue exploring the market before new purchases in anticipation of finding more competitive prices. In Southeast Asian markets, price hikes are also surfacing, although these increases are not as large as the ones seen in India. A Thai producer issued price hikes of US$30/ton over their August done deals for cargoes for September shipment. A company source reported to be receiving plenty of inquiries from buyers, and expect demand to remain healthy over the near term. Export offers to Thailand and Malaysia are also reported higher with a trader offering Malaysian cargoes, as their customers in Mediterranean countries make active price inquiries. Nevertheless, he acknowledged that higher export prices are not likely to be accepted by many buyers.