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Asian PVC players grope in the dark ahead of Taiwanese import offers

by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
  • 13/03/2024 (01:41)
Confusing signals from feedstock markets, despite crude oil prices staying above the $80/bbl mark for most of the previous month, and lack of offers from most northeast Asian suppliers have kept Asian PVC players searching for direction ahead. Most players are expecting the Taiwanese major to roll over offers from March on its allocations for April, if not a slight dip or spike ahead.

In India, the world’s biggest buyer of PVC, players have reported ample availability in the local markets, which is keeping them away from committing to fresh import offers. The previous week witnessed an uptick in offers from China, but buyers mostly ignored the higher levels resulting in high-end prices disappearing in the current week, traders said.

At the same time, Japanese and South Korean offers were missing in the last couple of weeks, with both reportedly waiting for a clear direction to emerge from the Taiwanese major’s April pricing, expected in the next couple of weeks.

Slack in local markets keeps Indian buyers away

“There are ample volumes of PVC in the domestic market currently. Most players say they can afford to wait for the right prices in the import market before taking buying decisions. It’s not because demand has weakened. It’s because there’s enough in the local market currently for requirements in the near term,” a PVC trader based in India said. “Most local dealers are focusing on cutting down the slack before deciding on buying import cargoes,” he added.

Traders say a major reason for the lack of any intense buying activity for PVC in India could be the ample volumes of imported material coming into the local markets. In December 2023, India’s imports rose by about 57% year-on-year to about 264,000 tons. India’s total imports of PVC for the whole of 2023 totaled about 3.1 million tons — about 70% higher than the previous year.

India, SEA prices decline in latest week

PVC import prices into India and Southeast Asia have seen a declining trend so far in the latest week. Import prices into India were flat to lower by $10/ton at the high end in a $780-820/ton CIF range. In Southeast Asia, import prices fell by $5/ton at both the ends from the previous week to $750-790/ton CIF. Despite the latest dips, ChemOrbis Price Wizard shows import prices have risen by 4-7% so far in the current year since early January.

China – India – PVC

Downstream weakness hits Chinese PVC markets

PVC market participants in China came out with a mix of expectations for the Taiwanese major’s April offers. Some players expected a rollover of March levels, while others were hoping for a small price decrease or increase.

In the latest week, local prices were held stable by suppliers despite a fall in PVC futures. “Converters are somewhat bearish in their outlook, as demand recovery has been slow so far this year. Buying has been mostly on a limited scale, on a stock-replenishment basis, given the weaker downstream requirements,” a source from a producer in China said.

However, a source at another producer expected stable pricing from March or a small hike by the Taiwanese major for April. “We have no news that the major will reduce prices. The FOB prices are still high, and each factory situation is different as far as China is concerned,” she said. “Downstream demand has been less than expected, and prices of finished products have also not risen much. Converters say it’s challenging to pass the higher costs to the downstream,” another producer added.

Southeast Asian players also painted a drab picture of the regional market. “We’re keeping import offers stable this week although the market is still weak. Most buyers have purchased already and so they prefer to wait till the next announcement by the Taiwanese major. We fell the major may keep offers stable,” a Vietnamese trader said.
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