Asian PVC players voice expectations for Nov pricing
Crude oil prices on NYMEX broke above the $50/barrel threshold on October 6 for the first time since June while futures closed with a $1.54/barrel increase at $51.35/barrel on October 10. Looking at futures markets, January PVC prices on the Dalian Commodity Exchange were CNY170/ton ($25/ton) higher on October 11 from a day earlier.
A trader operating in India noted that buyers are mostly expecting to see increases of around $20-30/ton on a major Taiwanese producer’s November prices. “We expect the major producer to announce their new prices around October 17 before buyers start to leave their desks for the Diwali holidays which will begin on October 28. Although we feel that another round of increases might meet resistance from buyers, firming crude oil is likely to support sellers’ hands for another month,” he commented.
A source from a Chinese acetylene based PVC producer reported that they issued a $5/ton increase on their FOB based prices following the end of the National Day holidays. The source stated, “Players were mostly expecting a downturn in the PVC market after the holidays; however, initial post-holiday offers suggest that a firm trend remains in place, supported by firmer energy costs and tight supplies, especially for acetylene based materials given the government’s environmental inspections. We believe that a major Taiwanese producer will approach Asian markets with a $10/ton increase on their new November prices in the days ahead.”
A source from a Southeast Asian PVC producer also stated that they expect a major Taiwanese producer to announce increases of around $10-20/ton on their PVC prices for November. “They might need to come with rollovers for December, though,” he further added.
The major Taiwanese producer raised their PVC prices to China, Southeast Asia and India for the last three consecutive months. They had issued a $40/ton increase on their October prices.
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