Lackluster demand keeps PVC prices down in Asia

PVC deals are settling with rollovers to slight decreases in Asia when compared with the previous month despite higher ethylene feedstock costs and firmer prices in China’s domestic PVC market, as per Chemorbis. Players pointed to relatively weak demand as the main factor weighing down on prices, with many sellers complaining of not being able to sell their normal monthly allocations this month. In China, May offers for mainstream Asian origins and for American cargoes were announced last week with rollovers from sellers’ initial April offer levels and slight increases from the April done deal level. Sellers attributed their stable pricing strategies to poor demand, with many adding that they were not able to sell their normal monthly quantities in China for April. This week, a major Taiwanese producer reported to have concluded deals for around 10,000 tons of material for May at prices stable to US$20/ton lower than their initial offers for the month. The producer is still negotiating with some of their customers looking for larger discounts. The domestic PVC market has gained some ground over the past week in China, with prices rising around CNY50-100/ton (US$7-15/ton) and sellers reporting that they are seeing better demand from downstream buyers these days. However, some of this pick up in demand for domestic cargoes could be the result of import substitution, as the prevailing import prices carry premiums of around US$150/ton when compared with the current domestic prices after customs and anti-dumping duties are taken into consideration. In Southeast Asia, May import offers have yet to be announced as players in Thailand have only returned to the market following last week’s New Year holidays. Thai producers had concluded their April business prior to the holidays at prices US$15-30/ton below their March done deal levels, as producers were willing to accept relatively lower prices in April to be able to conclude their monthly business prior to the holidays. The week-long holiday period in Thailand has also resulted in slower than normal PVC consumption in the region. In local markets, April business is settling with rollovers to slight decreases from the March done deal levels. In Thailand, producers reported concluding their April business at prices THB1000-1500/ton (US$31-47/ton) lower than their March done deal levels, with sellers commenting that they were willing to give more discounts than usual for April as the mid-April holidays resulted in a shorter trading month. Producers in Indonesia and Vietnam reported settling their April business with discounts of US$20-40/ton from their March done deal levels, with producers in these countries complaining of comparatively slow domestic demand and weaker demand from export markets in the Mediterranean owing to higher freight costs. In Malaysia, the done deal levels reported in the past two weeks stand around MYR70-150/ton (US$22-47/ton) lower than the early April offers announced in the country, with some converters in the country commenting that their PVC consumption is down around 20% for the month of April.