Asian PVC players voice early expectations for June
Crude oil prices on both NYMEX and Brent which are currently hovering below the $50/barrel threshold and high PVC inventories were cited as the reason for the further softening expectations. The upcoming start of the monsoon season in India is also casting a shadow on the demand outlook.
In India, a trader commented, “The Taiwanese major’s May announcement to India already weakened the market sentiment as the $80/ton decrease had exceeded the expectations. We expect to see a rollover from the major for June pricing.” A converter also opined, “We don’t expect to see any increase from the Taiwanese major considering the current market conditions.” Some sellers in India also do not think that any increase can be possible in the near term as demand traditionally fades ahead of June in line with the start of the monsoon season.
In China, a global trader commented, “Although demand in Southeast Asia and India is doing well due to the peak season for PVC, it is not lending support to prices due to high supply levels in these markets. The Taiwanese major informed us that their June pricing will most likely be announced on 22-23 May, after ChinaPlas Fair. We think June prices will be rolled over from May.”
Unlike India and China, players’ June expectations in Southeast Asia were mostly centered on additional decreases from the Taiwanese major’s May levels.
A Philippine trader noted, “We think the Taiwanese major will apply a further decrease of $20-30/ton for June shipment as crude oil prices are not supportive either.”
A source from an Indonesian PVC producer argued, “We think the Taiwanese major’s June announcement will be revealed with rollovers or $5-10/ton softening at most.”
A Vietnamese trader said, “We have suspended our purchases as we prefer to wait for the Taiwanese major’s June pricing, which we believe will be revealed with additional decreases of $20-30/ton.”
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