Local PVC prices see fresh drops across Southeast Asian markets
by Thi Huong Nguyen - thihuongnguyen@chemorbis.com
As of the week ending August 30, domestic PVC prices in Indonesia and the Philippines experienced renewed declines after weeks of stability. Meanwhile, prices in Thailand and Vietnam continued to fall, dominating local markets for another week. Even with Southeast Asia’s strengthening local currencies, prices still trended downward in US dollar terms, as shown in the graph below created by the ChemOrbis Price Index.
Weak supply-demand dynamics meet lower Sept offers
The region’s domestic markets took a hit from a combination of unfavorable supply-demand conditions and hefty decreases in a major Taiwanese producer’s September contract offers, leading to lower prices and weaker expectations for the short-term PVC outlook.
Just like other polymers, PVC K67-68 attracted low buying interest from regional buyers amid lingering weakness across downstream sectors, while supply pressure remained pronounced due to ample inventories. Under the poor fundamentals, the announcement of reduced benchmark offers from Taiwan significantly dampened market sentiment.
Fresh deceases snap 2-week stability in Indonesia
ChemOrbis data suggest that Indonesia’s domestic K67-68 prices ended two weeks of stability with the latest discounts. In US dollar terms, local prices edged down after a three-week uptrend, which had been supported by the appreciation of the Indonesian Rupiah against the US dollar.
A converter based in Indonesia commented, “Domestic PVC offers have been reduced again due to weak demand, oversupply, and the significant September cuts from the Taiwanese producer. While players expected reductions, the sharpness of the cuts was surprising. Converters remain bearish, as demand for downstream products remains stagnant and prices have been lower than anticipated. We expect prices to decline further in the near term.”
Domestic PVC prices in Indonesia were IDR200,000/ton ($13/ton) lower compared to a week earlier at IDR14,200,000-14,300,000/ton ($913-919/ton without VAT) on an FD Indonesia, cash including VAT basis.
Similar trends in Philippines
In the Philippines, local PVC prices have also followed a downward trend over the past few months, as shown in the graph below. PVC K67-68 prices in the country dropped by PHP1,000/ton ($18/ton) from the previous week to PHP52,000-53,000/ton ($844-861 without VAT) on an ex-warehouse, cash including VAT basis.
“Both import and local PVC prices reduced this week since a major Taiwanese producer sharply cut its benchmark offers to Asian markets. Additionally, regional and domestic demand has persistently stayed in the doldrums, exerting bearish pressure on sellers’ pricing,” a Quezon-based trader commented.
Thailand sees largest cuts, prices hit 3-month lows
Among domestic PVC markets in Southeast Asia, Thailand has shown the weakest performance. The ongoing rainy season has significantly dampened PVC demand in the country.
PVC K67-68 prices inside Thailand were assessed THB1000-1500/ton ($29-44/ton) lower in a weekly comparison, at THB26,500-27,500/ton ($780-809/ton) on FD Thailand, cash basis. Local PVC prices in Thailand have dropped by more than 5% over the past three weeks, with the weekly midpoint falling to its lowest level since late May. ChemOrbis data also shows a substantial $121/ton gap between local prices in Indonesia and Thailand.
Vietnam’s downswing enters 6th week
In Vietnam, the domestic PVC market’s downturn has persisted into its sixth week since starting in late July. Local K67 prices were stable to VND400,000/ton ($16/ton) lower from the previous week, now reported at VND19,800,000-21,200,000/ton ($796-852/ton) on an FD Vietnam, cash basis.
Locally-held Chinese cargoes reportedly offered a competitive edge in Vietnam. This, combined with unhealthy buying interest, resulted in additional price reductions from sellers. A trader said, “Some Chinese-origin shipments are offered at low levels of around VND19,500,000/ton. Therefore, buyers utilize these offers to negotiate prices for other origins. Demand is stagnant for both PVC and derivative products, and buyers still prefer small purchases in anticipation of further decline ahead.”
In the meantime, a Vietnamese producer announced its September offers to the local market with monthly decreases of VND1,600,000-2,000,000/ton ($64-80/ton). “We followed the declining import offers and lowered our prices for September. Demand is quite weak,” noted a source from the producer.
Weak supply-demand dynamics meet lower Sept offers
The region’s domestic markets took a hit from a combination of unfavorable supply-demand conditions and hefty decreases in a major Taiwanese producer’s September contract offers, leading to lower prices and weaker expectations for the short-term PVC outlook.
Just like other polymers, PVC K67-68 attracted low buying interest from regional buyers amid lingering weakness across downstream sectors, while supply pressure remained pronounced due to ample inventories. Under the poor fundamentals, the announcement of reduced benchmark offers from Taiwan significantly dampened market sentiment.
Fresh deceases snap 2-week stability in Indonesia
ChemOrbis data suggest that Indonesia’s domestic K67-68 prices ended two weeks of stability with the latest discounts. In US dollar terms, local prices edged down after a three-week uptrend, which had been supported by the appreciation of the Indonesian Rupiah against the US dollar.
A converter based in Indonesia commented, “Domestic PVC offers have been reduced again due to weak demand, oversupply, and the significant September cuts from the Taiwanese producer. While players expected reductions, the sharpness of the cuts was surprising. Converters remain bearish, as demand for downstream products remains stagnant and prices have been lower than anticipated. We expect prices to decline further in the near term.”
Domestic PVC prices in Indonesia were IDR200,000/ton ($13/ton) lower compared to a week earlier at IDR14,200,000-14,300,000/ton ($913-919/ton without VAT) on an FD Indonesia, cash including VAT basis.
Similar trends in Philippines
In the Philippines, local PVC prices have also followed a downward trend over the past few months, as shown in the graph below. PVC K67-68 prices in the country dropped by PHP1,000/ton ($18/ton) from the previous week to PHP52,000-53,000/ton ($844-861 without VAT) on an ex-warehouse, cash including VAT basis.
“Both import and local PVC prices reduced this week since a major Taiwanese producer sharply cut its benchmark offers to Asian markets. Additionally, regional and domestic demand has persistently stayed in the doldrums, exerting bearish pressure on sellers’ pricing,” a Quezon-based trader commented.
Thailand sees largest cuts, prices hit 3-month lows
Among domestic PVC markets in Southeast Asia, Thailand has shown the weakest performance. The ongoing rainy season has significantly dampened PVC demand in the country.
PVC K67-68 prices inside Thailand were assessed THB1000-1500/ton ($29-44/ton) lower in a weekly comparison, at THB26,500-27,500/ton ($780-809/ton) on FD Thailand, cash basis. Local PVC prices in Thailand have dropped by more than 5% over the past three weeks, with the weekly midpoint falling to its lowest level since late May. ChemOrbis data also shows a substantial $121/ton gap between local prices in Indonesia and Thailand.
Vietnam’s downswing enters 6th week
In Vietnam, the domestic PVC market’s downturn has persisted into its sixth week since starting in late July. Local K67 prices were stable to VND400,000/ton ($16/ton) lower from the previous week, now reported at VND19,800,000-21,200,000/ton ($796-852/ton) on an FD Vietnam, cash basis.
Locally-held Chinese cargoes reportedly offered a competitive edge in Vietnam. This, combined with unhealthy buying interest, resulted in additional price reductions from sellers. A trader said, “Some Chinese-origin shipments are offered at low levels of around VND19,500,000/ton. Therefore, buyers utilize these offers to negotiate prices for other origins. Demand is stagnant for both PVC and derivative products, and buyers still prefer small purchases in anticipation of further decline ahead.”
In the meantime, a Vietnamese producer announced its September offers to the local market with monthly decreases of VND1,600,000-2,000,000/ton ($64-80/ton). “We followed the declining import offers and lowered our prices for September. Demand is quite weak,” noted a source from the producer.
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