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Taiwanese PVC major set for new hikes despite delayed revival expectations in India

  • 08/09/2017 (02:15)
In Asian PVC markets, a firm outlook has been bolstered for the coming term now that a major Taiwanese producer revealed its intention to reveal renewed hikes for October shipments soon. This strong scene has appeared despite delayed expectations for a demand recovery in India. It is supported by the bullish developments in global upstream markets following Hurricane Harvey as well as the rising trend in China’s import and export markets.

The Taiwanese producer had initially announced its September PVC offers to India with a $60/ton increase month over month. Despite the fact that their hike request saw resistance from Indian buyers and they failed to achieve it, they have recently started to offer their unsold PVC allocation for September to India with an additional increase of $40/ton from their initial announcement for this month. This has brought their total hike amount to $100/ton over August.

According to players, although Indian PVC buyers have been resistant to the upturn so far, they are likely to accept that the sentiment will remain bullish in October amidst firm ethylene prices and growing supply concerns across the global markets.

A trader based in Shanghai stated, “The Taiwanese major may unveil its October PVC offers in the second or third week of September with increases of around $30-50/ton. This is despite the fact that expectations for a demand recovery were delayed from September to H2 October until after Diwali Holiday in India.”

Another seller in Taiwan commented that there are signs of a sentiment shift in India despite the ongoing monsoon season now that an Indian producer raised its offers to its domestic market. “Indian buyers will need to return to the market to replenish some inventories as part of their seasonal preparations. Moreover, the US is likely to be absent for a while as Harvey’s impact has been severe to the US Gulf Coast production for various products including ethylene and PVC,” he mentioned.

As for supply, players argue that buyers must be sitting on low stocks while traders do not seem to be working with high stocks either. “Environmental inspections caused supply of coal and PVC to diminish amidst shutdowns at coal plants. Thus, PVC suppliers, who are encouraged by the rising trend in China, might adopt a firmer stance through September and October across the region,” a player highlighted.

Expectations among buyers in India vary, meanwhile. A buyer noted, “We don’t think buyers will accept the possible hikes for next month either. They may remain hesitant, thinking that it is early to purchase material ahead of the peak season. Another converter argued, “Demand remains slow in India and South East Asia. Yet, the PVC market outlook is supported by rising PVC production costs, the upward momentum in China’s PVC market along with the plant shutdowns, particularly at Taiwan’s Formosa, and the impact of Harvey on several US plants.”
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