Japanese PVC emerges higher for Sep in India
After a Taiwanese major immediately sold out its August allocation at $870/ton with a monthly increase of $40/ton, Korean suppliers came with additional increases of $25/ton in the following week at $880-915/ton CIF India. Although they formed the high end of the range, a few traders claimed that they saw acceptance.
This week, Japanese PVC cargoes were offered to India for September shipments at $905-930/ton for k67 and k64, CIF India. When compared to deals concluded last week for August, they represent increases of $20-40/ton.
A compounder in India thinks that this new level can be achieved due to good demand and tight supplies. “Demand from Indian buyers mostly comes from Gujarat and Maharaja areas, where the monsoon season arrived late and they have not been heavily affected due to less rain. These Japanese cargoes will arrive in October, when the rains will be over. The currency is also in our favor. Therefore, we think that these Japanese offers can be digested,” he said.
A Japanese trader was also surprised by the speed of the increases in PVC. “The last time the Taiwanese major pushed above $900/ton in India was in March and it was not successful,” he reminded. Another trader argued that these levels would have a hard time being accepted, but small to mid- sized buyers may concede to them due to ongoing availability constraints.
Players are now wondering whether the Taiwanese major will follow this upward momentum. The producer will shut down its VCM and PVC units in August and therefore, its allocations will be limited.
In global markets, Westlake is preparing to return from a shutdown in August in the US while demand is fading in Turkey due to the recent turmoil. This is expected to put pressure on European suppliers and push them to look for alternative export destinations.
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