Taiwanese PVC offers for March garner limited acceptance in India

According to PVC players in India, the Taiwanese major’s March hike met with widespread skepticism and only approximately 6000 tons, representing roughly 30% of the total March allocations of around 20,000 tons from the major supplier, have been sold thus far.

Typically, the major can sell out its allocations within a day or two of its notifications being sent out to buyers. But its March prices came in $30/ton higher than its February offers at $820/ton, which took most players in India by surprise.

“Most of us were expecting the prices to come in stable from February. We don’t think the current March offers are reasonable. There’s stiff resistance in India at any move to increase prices,” a Mumbai-based player said.

Will the major revise prices downwards?

At the same time, the Taiwanese major was unlikely to revise prices as it did for June last year when it cut offers to India a further $20/ton after notifying a $40/ton reduction earlier.

“That is not done normally, as the Taiwanese major’s Asian pricing is considered a benchmark. However, news of the major conceding to give discounts to Vietnamese buyers have reached here too and there’s bound to be some pressure from buyers here,” the player added.

The major Taiwanese producer has reportedly agreed discounts on March shipment deals, as the producer has still not been able to sell out its monthly allocation in any of the regional markets.

Major’s price hike attributed to input costs

At the same time, other players also point to higher freight rates because of the increase in the energy complex prices and tensions in the Red Sea.

“We’ve seen freight rates rising for PVC feedstock such as EDC and VCM shipments to Asian destinations. This, along with the rise in ethylene prices over the past month, has meant a steep increase in input costs for producers. Freight costs have also increased for intra-Asian sectors. We don’t think the major will revise prices downwards for March, considering these circumstances,” said another major trader based in Mumbai.