PVC draws a stable to firmer outlook in Asia

05-Jan-12

January PVC deals have been mostly concluded at higher levels throughout Asia amid strong VCM values as well as reduced availability, as per ChemOrbis. Players in China reported increases of US$20-70/ton on PVC done deals for cargoes to be shipped this month. A trader has expressed sell idea to China for US PVC k67 with shipment in late January at a level standing US$20-30/ton above the recent done deals. In Southeast Asia, import PVC cargoes have been sold higher for January with the overall import range posting an increase of US$20-30/ton this week. The import PVC market in China and Southeast Asia has risen for two consecutive months after a steadily falling trend spread over five months. Now players are trying to estimate if the same factors that triggered higher prices in December and January will render a firm outlook for another month in the region. Even though the market has not fully resumed its activity this week following the New Year holiday and demand is not so encouraging ahead of the approaching Chinese New Year holiday in the third week of January, the general expectation is about seeing a stable to firmer trend in next month’s deals, as per ChemOrbis. This is because VCM costs remain high amidst the ongoing supply restraints from Tosoh. The absence of this major Japanese supplier following explosion at its site in mid-November is still causing many non-integrated PVC producers to run at reduced rates. Accordingly, initial import offers for February are expected to be announced US$10-20/ton higher to China, in several Chinese players’ opinions, while the status of demand is to set the outcome of the settlements for next month. Meanwhile, several domestic producers in Southeast Asia are drawing an optimistic outlook for their sales over the short term after they have all raised their prices to their local markets upon relatively good demand and firm costs.