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Players: PVC demand in Indonesia set to pick up

by ChemOrbis Editorial Team - content@chemorbis.com
  • 07/09/2016 (15:48)
In Indonesia, PVC supplies have been tight for some time. Now, players are also pronouncing expectations regarding an improvement in PVC demand in line with the recent promotion campaign on pipe manufacturers’ side, upcoming infrastructure projects in the last quarter and better performance of the automotive sector.

A producer in Jakarta reported that they are going to shut their PVC plant for 2 weeks while also shutting one VCM line for a month. A source at the producer commented, “Demand in September has improved surprisingly, especially for soft applications such as film and cables. However, demand from the pipe sector did not show a spectacular performance and therefore pipe manufacturers implemented some promotional campaigns to boost demand. Supplies are still limited, not only from Taiwan, but also from Korea, Philippines and Thailand. Our export demand is quite good as our Malaysian and Singaporean customers asked for additional quotas despite price hikes, but our export allocation is already more than usual. We generally export 15,000 tons a month, but this month we have already exported 20,000 tons of material.”

Another producer deemed supply and demand in Indonesia as balanced. “If we look at it on a sector basis, we see better demand from the food packaging sector while the pipe sector is not expected to grow much. This is because of the delayed government projects, which have not been released so far,” a company source said.

A trader also predicted that demand in Indonesia will be picking up soon in line with the start of infrastructure projects in Q4.

A compounder reported that they couldn’t receive any quotas from a Taiwanese major while sourcing some material in small quantities from another producer. “Demand has started to pick up with support particularly from the automotive sector. We are waiting for our cargoes to arrive for now and have sufficient material to last until November. We had built inventory in advance with the expectation of seeing further increases,” said the compounder.

Along with the improving demand and the upcoming maintenance shutdowns at a local producer’s upstream and downstream plants, players expect PVC prices to move higher in the near term.
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