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India, SEA PVC markets unlikely to take respite from bullish run for November

by Pınar Polat -
  • 08/10/2020 (04:07)
Several Northeast Asian suppliers have approached import PVC markets in India and Southeast Asia with a firmer pricing this week. This is because a major Taiwanese producer is highly expected to seek a new round of hikes for November amid the global dearth of supply.

Bullish run poised to last for 6th consecutive month: longest rising streak

November offers are expected to be revealed next week after China’s return to business from the week-long national holidays. No offers have been made to China this week by major suppliers due to the holiday lull.

Import PVC markets already hit six-year highs in SEA, India

According to the weekly average data obtained from ChemOrbis Price Index, PVC K67-68 prices on CIF Southeast Asia/India basis have already been steadily increasing since early May to stand at $1050/ton and $1100/ton, respectively, standing at their highest in six years.

If November offers spring up with hikes in tandem with expectations, the bullish run will extend into six months, which would be the longest winning streak since ChemOrbis started keeping records in 2008.

Expectations vary regarding the size of the hike

Although market players concur regarding a new round of hike for November, they are divided on the size of it.

A regional trader said new offers could see hikes of around $30-40/ton but it will be clearer next week after China’s return to market while some producers expect $80-100/ton increases.

Tightness continues to propel PVC markets higher

The global supply tightness has been triggered by plant issues in the US, Europe and currently also in Asia.

Deep-sea cargoes from the US Gulf cargoes heading to Asia are unlikely to arrive until early next year and half of Asian PVC demand is traditionally met by deep sea cargoes, according to market players.

Cost support from feedstocks persists

In addition to supply, there is also cost support from feedstock ethylene . ChemOrbis Price Wizard shows that spot ethylene prices mark the highest level within the past year.

High prices cause buyers to shift to alternative products

As an indicator of the growing resistance on the buyers’ side, some players in Southeast Asia have started to use substitute products for PVC in order to reduce their costs.

A Philippines-based end product maker warned, “In Southeast Asia, these sky-high prices will not be supported by local buyers and converters, who have already started substituting some applications with HDPE and PET raw materials.”
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