Taiwanese major’s January PVC announcement catches Asian players by surprise
Following an upturn of more than five months, the sentiment shifted around the beginning of December in PVC markets across Asia. The softening trend, which was driven by slowing demand in line with the beginning of low season for PVC applications as well as improving supplies from import markets, has coincided with the firming trend in the upstream markets, where ethylene prices were boosted further by the rising energy complex.
Therefore, many players were expecting this firming in feedstock costs to lead to rollovers or keep the anticipated decreases from the Taiwanese major in check for January offers. Indian players were also pointing to the expectations of seeing an improvement in demand after January and the Taiwanese major was widely believed to be having lack of stock pressure. Having thought that these factors would prevent any price erosion as reported earlier today in ChemOrbis Daily Headline Asian PVC players voice January expectations , players have been caught by surprise upon receiving the $50/ton decrease.
“We will secure more January materials than we initially planned as we believe that demand in India will improve after January once the cash problems are solved end the high season starts. Meanwhile, we heard that supplies from the Taiwanese major are still limited,” said a trader in India.
A global trader operating in China, meanwhile, said, “Now that the Taiwanese major’s offers have come with a more-than-expected decrease, the existing export offers from China are no longer offering a competitive edge. We are not able to conclude any deals for our US PVC offers to Vietnam either.”
A trader in Southeast Asia also expressed his surprise, saying, “The Taiwanese major has been very generous with the PVC decrease for January. We take it as a Christmas gift.” A trader in India also commented, “This must have been done to revive demand as currency issues hampered trading activities considerably amid the low season.” A second trader in India thinks that although they were surprised by the amount of the decrease for January, demand may still fail to improve as buyers may still find the recent levels high to accept.
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