PVC prices may be near a peak in South East Asia

12-May-15

In Southeast Asia, players in the PVC market argue that prices are currently near a peak and that further increase attempts may not succeed. In addition to the upcoming monsoon in India as well as comfortable supplies, the recent decreases in ethylene costs are another factor adding to expectations that the market is close to a peak, according to ChemOrbis. Spot ethylene prices in Asia declined by around US$80/ton week over week. Lower prices were attributed to incoming cargoes from the US as well as slower demand from China. A source from a Southeast Asian producer reported, “We raised our local PVC prices by US$20/ton to Indonesia at the beginning of May. However, spot ethylene prices have posted notable decreases recently. In addition, the depreciation of the Indonesian Rupiah against the US dollar is hampering buying interest. Supply is sufficient and demand is not supportive of further price increases.” A distributor in Thailand added, “A local producer announced increases of THB1000/ton (US$30/ton) on their domestic PVC prices at the beginning of May. However, buyers are showing resistance to higher prices.” According to ChemOrbis, some buyers in Singapore reported that they expect lower spot ethylene prices to exert downward pressure on PVC prices and commented that the market does not appear to have room for further increases for the upcoming month. In Vietnam, a pipe and fitting manufacturer made some purchases with rollovers from last month in the local market. According to the buyer, the market is showing signs of a slowdown and PVC prices might see a correction soon. A compounder also bought Vietnamese PVC at stable levels from last month, commenting, “We are planning to take a cautious stance in the short term as we think that PVC prices have no room to gain further ground.”