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Asia PVC markets continue free fall as Aug offers from Taiwan plummet

by Merve Sezgün - msezgun@chemorbis.com
  • 20/07/2022 (02:40)
Import PVC prices in Asia have been falling since mid-April while the pace of losses has increased in the recent weeks. Many players think that the bottom is still out of sight as demand remains subdued amid volatile energy markets, growing inflationary pressures, ample supplies, and a seasonal slowdown in major markets.

3-digit Aug drops from Taiwanese major

The major Taiwanese producer’s August price announcement has underscored the bearishness of PVC one more time. Compared to July levels, the producer slashed its new offers by $230/ton to India, $190/ton to China, and $200/ton to other regional markets.

This was the fourth consecutive month of decreases from the producer. Compared to the April levels, their contract prices for August are down $460/ton to China and $550/ton to India cumulatively.

In the spot markets, the weekly averages of PVC K67 prices on CIF China/India basis have plunged 33-35% from mid-April levels, according to data from ChemOrbis Price Index.

PVC – Import – China – India

Major Indian producer cut local prices after the notification

Following the price notification from Taiwan, an Indian major also announced a fresh price cut on its domestic offers.

The producer reduced its PVC K67 offers by INR8000/ton ($100/ton) to the domestic market with effect from July 20. Last week, the producer applied another price cut of INR6000/ton ($75/ton).

The weekly average of local K67 prices on ex-warehouse India basis has plunged 34% since the downward trend kicked off in mid-April, according to ChemOrbis Price Index data.

A trader operating in the country commented, “Prices are diving so fast that some Indian buyers who have made advance payments of 20-30% to Chinese suppliers are now not willing to pay the rest since prices have dropped more than 30%.”

Sentiment slightly better in China; but this may not last long

At the start of the week, China’s PVC sentiment slightly improved since Dalian futures rose as a knee-jerk reaction to rising crude oil prices. According to some market sources, local prices even stabilized as sellers refused to reduce their spot offers further when futures were firmer.

However, most players question the possibility of any firming in PVC prices, pointing to persistently weak demand at home amid renewed Covid fears.

SE Asian buyers: Local prices to drop further after Aug announcement from Taiwan

Several PVC buyers across Southeast Asia and India said that they expected additional decreases in local prices following the Taiwanese major’s sharply lower price notification for August.

“Suppliers have kept their local PVC prices stable so far this week. However, we believe they will soon apply a fresh round of visible decreases on their offers, particularly after the Taiwanese major’s $200/ton price cut to the region. Local demand is persistently weak,” noted a few converters in Vietnam.

A buyer in Indonesia also explained, “Local prices are down sharply in line with the plummeting August prices from Taiwan. Demand remains sluggish given lower downstream production.”
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