Asia PVC markets see no respite from price rally; 3-digit hikes expected for Apr

The price rally in Asian PVC markets has continued without respite amid global tightness. Regional suppliers’ spot offers to China, India, and Southeast Asia have already moved around $250/ton above the major Taiwanese producer’s March levels which were at $1210/ton CIF China and $1340/ton CIF India.

The producer is likely to reveal its April offers next week while players’ expectations are calling for three-digit hikes.

This week, import PVC K67 prices were assessed with increases ranging from $90/ton to $120/ton at $1400-1500/ton CIF China, $1440-1530/ton CIF SEA, and $1560-1650/ton CIF India. At these levels, prices are at their highest since ChemOrbis began keeping records in 2008.

“The major producer is likely to apply an increase of at least $100/ton on its new offers for April. Offers to India may see larger hikes than offers to China,” a few players commented.

Lack of deep-sea supply to keep prices elevated

PVC prices in Asia are expected to remain firm due to the global supply shortage driven by US supply disruptions, with a potential long drawn absence of deep-sea cargo availability for most of the first half of 2021.

The snow spell forced operators in the US Gulf to shut refineries and PVC plants, including those of Formosa Plastics and Westlake Chemicals. While the wintry conditions have subsided, a return to full operations is expected to take 1-2 weeks.

Indian demand buoyant; Reliance’s shutdown fuels tightness

India has been the sole bright spot in Asia for sellers due to strong demand and high prices. PVC demand from the country has increased due to summer agriculture requirements and as businesses drum up more activity to close their books for the year on a strong note. India’s fiscal year ends in March.

Tight availability also spur buying interest while Reliance’s planned turnarounds have added to mounting supply woes.

CIF China prices still not attractive to sellers despite highs

The upturn in China’s PVC market continues to lag behind other global markets despite the lofty hikes recorded in the past two weeks.

“There will unlikely be deep-sea cargo arrivals into Asia, from Europe or the US for most of the first half of the year. Even if supply lengthens in the US Gulf, the surplus availability would be directed to higher-margin markets in Europe, Africa, and the Middle East. For Asia, the only attractive higher margin market is India, which will probably get some deep-sea cargoes in April or May. Chinese producers will likely continue to focus on export outlets,” said a trader.