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SEA producer follows Taiwanese major’s PVC decrease decision

by ChemOrbis Editorial Team -
  • 21/12/2016 (18:04)
A source from a Southeast Asian producer reported that after the Taiwanese major’s January PVC announcement to Asian markets with a $50/ton decrease from their December levels at $920/ton CIF SEA, cash; they also followed suit and brought their offers to the same level.

The source commented, “We heard that the Taiwanese major has still not yet sold out to China and Southeast Asian markets. We have started to follow the Taiwanese major’s reduction decision and we lowered our PVC prices by the same amount to $920/ton CIF SEA, cash. However, we are open to start negotiations at $910/ton. In the local market; players are mostly focusing on the 2017 budget plan and currency depreciation. Supply in Indonesia was tight last month as most of the producers focused on exporting but this has started to improve by early December. For January, we think that customers will restrict their purchasing quantities until they see a clearer market direction as they have concerns about the government’s financial strategy."

The source added, "For the export market, buyers in Malaysia and Singapore seem to be able to accept the $910/ton CIF level. Our market share in Malaysia increased in line with higher prices for Chinese materials and limited export supply of Chinese producers in the past few months. We have already resumed operations at our plant and we will be running it at full rates until the next maintenance which will take place in the February-March period. We think that ethylene and VCM costs will prevent the Taiwanese major’s PVC offers from falling for the next month.”

A trader based in Malaysia said, “We heard that the Southeast Asian producer is offering PVC at $905/ton to end-users in Malaysia. In terms of supply, we are receiving our usual allocation.”

Another Malaysian trader opined, “In the last few months, customers in Malaysia started to use the Southeast Asian producer’s material in order to replace high priced Chinese materials and it seems like they already got used to this.”
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