Southeast Asian PVC sellers stepping back on October hikes

Southeast Asian PVC sellers have been struggling to achieve their October price increase targets in the face of resistance from buyers, according to ChemOrbis. Some sellers have already begun to step back from their initial hike requests while many buyers say that they are staying to the sidelines in anticipation of achieving discounts on their deals. A Thai producer who had initially sought US$20-30/ton increases for October, reported to have retracted prices and is now seeking rollovers. “We had to back off from our hike targets as demand was not supportive. However, we are insisting on achieving our initial hike requests in India as we believe that demand in that country will be stronger in the coming month,” a producer source commented. A source from an Indonesian producer said, “We lifted our initial October prices in line with higher offers from other regional sellers, but we think that we may need to agree to some discounts before we manage to conclude deals.” Another Indonesian producer admitted that they are facing difficult negotiations for October business, but added that they will insist on achieving at least a US$10/ton increase as their October allocation will be limited due to a plant maintenance. A Malaysian converter expressed their buy ideas for Thai PVC US$60/ton below the initial offers they received on a DAP basis. “We do not think that sellers will lower prices to match our buy ideas, but we believe that we will be able to conclude deals with rollovers from the prior month,” the buyer stated. A pipe converter in Singapore said that they are not planning to purchase the initial offers they received for Indonesian PVC. “We find the prices we received to be quite high. We are sticking to the sidelines at the moment as we believe that the market will change direction soon,” the buyer reported. According to ChemOrbis, players in the region’s local markets are also expressing skepticism about the feasibility of October increases. A Vietnamese producer gave their sell ideas for October with US$18-24/ton hikes, commenting, “We will attempt an increase next month as costs are high and international trends are still firm, although we are not sure as to whether or not the market will accept further increases.” A source at a Philippine producer said, “The initial October prices are too high and we expect to see price revisions before the end of the week. We have had to reduce our operating rates recently as the recent flooding in the Philippines has made it difficult to deliver our cargoes.” An Indonesian producer said that they still have around 20% of their September allocation to the local market available. “Large buyers are willing to purchase, but are insisting on discounts to reflect the recent weakening in the rupiah while smaller buyers have scaled back their purchases, complaining that demand for their end products is not good. We are not satisfied with the state of local demand and may divert the remainder of our domestic allocation to the export market if we cannot finish our sales targets by the end of this week,” a producer source commented.