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Taiwanese major poised to come lower for a 3rd month to Asian PVC markets

by Shibu Itty Kuttickal -
  • 13/01/2022 (03:05)
Most Asian PVC market players expect a major Taiwanese producer to offer February imports at prices lower than for January, with some predicting a slide of up to $100/ton, as the sentiment remains bearish.

The producer, whose monthly PVC offers are considered a benchmark in the Asian market, in mid-December, cut prices by $120-130/ton in its January offers to the Indian and Chinese markets to $1590/ton CIF India and $1360/ton CFR China, with no volume discount on offer.

“The Taiwanese producer wants to wait and monitor the market for a few more days. It is worried about the rapid increase of new COVID-19 cases in India and also new breakouts in some Chinese cities,” a trader in China said.

New offers expected on January 18

The producer was expected to come out with its February offers in the second week of January — typically done on Tuesday — but players said the new prices would now likely be released on January 18. Players said the company was deferring the move probably because of the current bearishness and the lack of activity in the current market.

In India, import PVC K67 prices of overall origins have been assessed stable this week at $1500-1590/ton CIF, cash. This week also saw the overall range for import PVC K67 offers assessed flat at $1340-1400/ton CIF China, cash. ChemOrbis Price Wizard shows Indian import PVC prices have slid by $35/ton over the past month, while import prices into China and Southeast Asia have fallen by more than $100/ton over the same period.

Indian players remain bearish

“The Taiwanese producer will have to reduce prices by about $100/ton,” said a trader in India. “We don’t see a lot of buying currently, as people generally think there’s still some way for prices to fall further.”

“And, there may not be a lot of buying for February anyway as the producer has already sold part of the monthly requirements along with its January cargoes because of the Chinese New Year holidays in February first-half,” he added. March requirements may also be low as India’s financial year draws to a close on March 31, ahead of which companies tend to keep inventories limited.

As for the slower fall of Indian import prices lately, compared to China’s and Southeast Asia’s, a source at a major Indian producer said most buyers kept waiting for prices to fall further on concerns over the continuing spread of COVID-19 and its Omicron variant. “Prices have not fallen as much as we wanted and import buyers mostly stayed away. People have been buying only for immediate requirements.

“In early December, we saw domestic sellers offering heavy discounts. But we’ve found lately even local buyers are keeping away,” a source from a local producer said. Activity in the domestic market stayed dull also because sellers were saddled with material booked before December at prices above $1700/ton CIF India. “They are looking to cut as many losses as possible on these stocks in the local markets. So import buying has been too slow,” he said.

The direction is down, say players in China, SEA

Expectations of Chinese and Southeast Asian players were for a $50-100/ton cut. “We’d like to take a fresh look this week before expressing expectations. After just returning from holidays, some regional markets are about to go for a longish break for the Chinese New Year. It’s best to wait and watch, but we certainly expect the Taiwanese producer to announce further price cuts for February,” said a trader based in Vietnam.

“The Taiwanese producer has delayed price announcements as the market sentiment is too weak at the moment. Done deals have become a rarity. Customers definitely want to see prices dropping further,” a trader in China added. A small PVC producer in Taiwan said everyone agreed prices would be cut but differed on how much. “Some see a drop of $80/ton, some others $100/ton,” he added.
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