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November expectations voiced in the Asian PVC market

  • 13/10/2016 (04:38)
In Asia, PVC players started to voice their expectations for November price announcements, with most of them focusing on hike attempts on the back of the recent gains in global energy markets combined with stronger PVC futures prices on the Dalian Commodity Exchange.

In China, in addition to these supportive factors, a fresh round of replenishment activities and reduced supply levels, especially for acetylene-based materials led to stronger expectations for the upcoming period. This is despite players’ pre-holiday expectations that called for a downturn after the week-long National Day holidays.

A source from a Chinese acetylene based PVC producer reported, “Players were mostly expecting a downturn in the PVC market after the holidays; however, initial post-holiday offers suggest that a firm trend remains in place, supported by firmer energy costs and tight supplies, especially for acetylene based materials given the government’s environmental inspections. We believe that a major Taiwanese producer will approach Asian markets with a $10/ton increase on their new November prices in the days ahead.”

A Southeast Asian producer reported that they are surprised with the significant increases on Chinese offers; especially for carbide based materials which have overtaken ethylene based PVC offers recently. “We expect the Taiwanese major to announce their new November PVC offers with increases of around $10-20/ton from September. We prefer to wait and see for next week when the producer is expected to reveal its new levels,” added the producer source.

Another producer in the region also shared the same expectations. According to the producer, a major Taiwanese producer may implement increases of around $10-20/ton on their PVC prices for November. “They might need to rollover their offers for December, though,” he further added.

A plastic end product manufacturer operating in Philippines, however, opined that if the Taiwanese producer implements another $40/ton increase on its offers, the market would not be able to accept it as demand hasn’t fully recovered and current price levels are already too high.

In India, players’ expectations centered on increases of $10-30/ton for the major’s November shipment offers. “We expect the major producer to announce their new prices around October 17 before buyers start to leave the market for the Diwali holidays which will begin on October 28. Although we feel that another round of increases might meet resistance from buyers, firming crude oil is likely to support sellers’ hands for another month,” commented a trader.
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