Will shutdowns keep Asian PVC prices stable in August-September

Asian PVC prices backtracked somewhat over the past week as several producers stepped back from their August increase targets, as per ChemOrbis. Buyers in the region are reportedly hoping to obtain some price relief in the coming month, complaining that their margins have been damaged by persistently strong raw material costs while the difficult global economic situation has made it difficult to raise their end product prices. However, news of some scheduled shutdowns in Taiwan and Japan may help sellers hoping to avoid any price reductions in the coming months. A converter manufacturing pipes and fittings in the Philippines reported that they received new prices from a Thai supplier this week with rollovers or even slight reductions from July after the producer had announced an initial US$30/ton price hike for August last week. “Our supplier stepped back on their prices and we hope to be able to obtain some additional discounts after negotiations. Demand for our end products is not all that encouraging for now, but we are still looking to acquire some cargoes as our stock levels are a bit low,” the buyer commented. A Chinese converter manufacturing rigid PVC film said that they purchased some Taiwanese PVC after their supplier agreed to step back from their initial August hike requests. “We are currently searching out offers from different suppliers and we may make some additional purchases if we manage to locate attractively-priced cargoes,” the converter reported. A converter in Malaysia stated, “Supply currently exceeds demand in the PVC market and buyers are sticking to the sidelines even after sellers agree to some discounts.” Regional PVC producers also complained of difficulties concluding deals, with most sellers currently hoping to achieve rollovers from July. A source at a Japanese producer said that their customers are placing bids US$10-20/ton below their offer levels, adding that they plan to hold onto their offers a while longer in hopes that buyers will be more willing to accept their prices in the coming weeks. A source from a South Korean producer who announced their August prices to Southeast Asia with a rollover said, “Buyers are asking for US$20/ton discounts from our initial prices. We are not willing to concede to discounts just yet, but we are not optimistic about our prospects for the coming month as we do not expect to see much improvement in demand and we feel that prices may see some reductions in the August.” While the current supply-demand dynamics seem to support buyers in their hopes of obtaining some price relief in the coming month, some upcoming shutdowns within the region may give sellers some ground to take a firmer stance on their prices according to ChemOrbis. Market sources report that Japan’s Kaneka is planning to shut three PVC plants with a combined capacity of 575,000 tpa during August for maintenance work which will take approximately three weeks. China’s LG Dagu’s 400,000 tons/year plant is also scheduled to undergo a month-long shutdown in August. Meanwhile, Taiwan’s Formosa is planning to shut its 420,000 tpa PVC plant in Mailiao for maintenance work which is scheduled for last for around two weeks. In addition, Indonesia’s Asahimas is planning a month long maintenance shutdown in September at its 300,000 tpa plant.