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Asian PVC markets stay strong as tightness overshadows virus fears

by Merve Sezgün - msezgun@chemorbis.com
  • 06/02/2020 (09:03)
PVC suppliers have maintained a firm stance on their offers to Asian markets, as the sentiment has stayed strong on the back of tighter supplies coupled with robust demand particularly from India. Despite ongoing fears of the coronavirus outbreak, players’ March expectations signal further hikes.

Prices move higher in India, SEA ahead of March announcements

In the first week after the Lunar New Year holiday, overseas sellers approached the Southeast Asian PVC market with fresh increases of around $10-20/ton, pointing to limited supplies.

In India, import prices also edged higher on the back of buoyant demand. “India’s PVC demand is now robust thanks to increased seasonal activity. Tight supplies across Asia also support the sentiment,” a trader said. A major domestic producer, meanwhile, lifted its local PVC offers by INR1000/ton ($14/ton) as of February 1.

China is stable amid virus-hit trade

As for China, the import market remained largely stable at pre-holiday levels. Players reported that most offers were notionally given due to the lack of trading activity.

“Although the holiday has officially ended, trading is yet to return to normal given the virus outbreak. Still, the sentiment is firm for PVC with support from limited availability,” a trader noted.

Due to the virus-hit activity, China’s PVC exports may increase over the upcoming term, some players also opined. The country’s total PVC exports in 2019 were down 14% year over year to hit the lowest volume in seven years, as data from ChemOrbis Stats Wizard suggest.

Higher export offers from US add to firm sentiment

On top of the bullish factors in Asia, the recent increases in FAS Houston PVC offers have also supported the sentiment across the region.

A trader based in India commented, “The number of PVC offers from overseas suppliers has decreased this week due to the recent hikes applied on export prices from the US. We hear that K67 offers have increased to $830/ton FAS Houston. Sellers now prefer to wait in anticipation of achieving further hikes in deals in the weeks to come.”

March expectations center on fresh hikes

Players expect March to be another month of increases due to a combination of tight availability, increased demand from India and higher price announcements from the US.

“We will see the real impact of the virus outbreak in the second half of the year. For now, tightness is dominating the PVC sentiment in Asia. Supplies will be tighter in the second quarter due to the approaching maintenance shutdowns,” a source at a Far East Asian producer said.

A major Taiwanese producer is expected to announce its March PVC offers to Asian markets with an increase of around $20-30/ton. The producer had pioneered $20/ton hikes for February.
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