Expectations calling for slower PVC demand in SE Asia, India
In India, a trader noted, “May is an important month in terms of trading as next month is the start of the monsoon season, which causes demand to disappear for 2 to 3 months. A Chinese trader said, “Although demand from the Indian market is still performing normally, it is expected to weaken in the following months considering the monsoon season in the country.”
In Vietnam, a pipe manufacturer commented, “We think the June pricing of the Taiwanese major must indicate small decreases if the producer aims to bring large quantities to the market before the monsoon season. In case of a rollover from May levels, buyers may continue to source based on their needs.” A converter said, “We have built sufficient stocks until the end of June as it already started to rain in the northern part of Vietnam. Demand will decelerate further next month, but we may consider purchasing some materials for July if prices move lower.”
In the Philippines, a converter opined, “PVC demand has been stable so far this year. Despite our anticipations towards a 10-15% of growth, sales in the first four months of 2017 were unchanged from last year or retreated by 5%. We think PVC prices will remain weak for the next couple of months in the face of the rainy season which starts around July.” A trader lamented, “Demand from end-users is still not up to expectations in the Philippines. It is because of customers are unwilling to stock up ahead of the monsoon season.”
In Indonesia, a source from a local producer stated that they are not expecting demand to improve any time soon as the month of Ramadan is approaching and it will be followed by the Lebaran holidays.
In Malaysia, a compounder noted, “Demand was quite good in the first week of May. However, it may slow down in the weeks ahead of the month of Ramadan as customers have mostly secured materials.”
Meanwhile, players’ June pricing expectations in Southeast Asia were mostly centered on rollovers to small decreases from the Taiwanese major’s May levels, which came with an $80/ton of decrease.
Players are yet to see if the regional shutdowns will counterbalance the expected weakness of demand next month across Southeast Asia and India.
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