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Low inventories support Vietnam’s local PVC market

by Abdul Hadhi - ahadhi@chemorbis.com
  • 04/01/2021 (15:54)
Vietnam’s domestic PVC market has chalked up gains over the past two weeks amid restocking activity.

Weekly average local PVC prices excluding VAT are up 5% over the past two weeks at $1319/ton on FD Vietnam basis from $1252/ton in mid-December and are at their highest since May 2011, according to ChemOrbis Price Index data.

Import prices into Southeast Asia have been stable at $1270/ton CIF over the period and are also at their highest since May 2011.

Offers become scarce

A local converter said, “We don’t receive any offers. Our inventory is quite low and so, we may need to buy extra now. But there’s limited supply everywhere and it’s the same situation for local material.”

“We worry that prices can increase even further. Demand for end-products exists but prices of raw materials keep moving up which has put end-product makers under pressure,” the buyer added.

Import delays cause tightness

From the seller’s perspective, a source at a domestic producer said that his firm has raised prices slightly and explained that supply has been tight while demand is alright.

He said, “Supply is limited as buyers are ordering much more than before. Import cargoes are delayed because of shipping issues which has led to supply tightness in the market. Our VCM inventory is also low because of shipping issues.”

In addition to high rates, a shortage of vessels and containers have also caused delays in shipments.

“Another reason is that prices are up a lot and so buyers have been buying only small volumes for a long time. And now they are back in the market to replenish their low inventories,” he added.

Market awaits February import offers

Industry players await February offers to Asia by a major Taiwanese producer expected next week.

The Taiwanese major - which usually sets the lead for regional markets - has hiked monthly offers consecutively from June last year as countries started to ease COVID-19 lockdowns.

The higher offers were also driven by tight supply due to a number of force majeures by plants in the US and Europe. However, some of them have since resumed production.
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