Taiwanese PVC major’s first price cut in 2018 exceeds expectations
As was noted earlier in a ChemOrbis Headline Story India’s PVC market sees little impact from bullish China ahead of May offers, players’ initial expectations were calling for rollovers to slight drops as the firming trend in China’s local market, which kicked off in early April amidst firmer futures and maintenance shutdowns, has had a very limited impact on India, where demand remains tepid given the approaching monsoon season as well as the central banks’ ban on some loan instruments.
Following the major’s new announcement, players shared their comments about how the Asian PVC market will be shaped in the near term.
A source from a Chinese producer commented, “It seems that the Taiwanese major is now more aggressive to sell as demand will slow further down in India in tandem with the monsoon season.”
A trader in India said, “The monsoon season will hit India in around May or June. Plus, the central bank’s decision has weighed on the country’s appetite for import PVC as small and middle scale buyers are facing liquidity issues in the absence of letters of undertaking (LoUs) and letters of comfort (LoCs). Still, we think that the major’s May offers will see buying interest as the new levels are reasonable. We also expect a domestic producer to lower its PVC offers this week.”
A PVC compounder in Indonesia noted, “We heard that the Indian market was under pressure from the central bank’s ban on some loan instruments. Yet, we are still surprised by the major’s significant drops on its May offers when the Chinese market is following a firm path.”
A source from an Indonesian producer also opined, “Buyers keep on purchasing on hand-to-mouth basis given the approaching Ramadan while the Taiwanese major’s lower May prices has weakened the sentiment further. We are planning to decrease our May offers by $30-40/ton as well.”
A converter in the Philippines said, “Local traders have reduced their PVC offers by PHP2000/ton ($38/ton) following the Taiwanese major’s May announcement. Now that the local market is on a downtrend, we expect import PVC prices to follow suit.”
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