Tightness shapes expectations for Sept PVC pricing in Asia
This is with support from the ongoing tightness across the region and the globe.
The major producer had also applied a firmer pricing from June to August, with monthly hikes varying between $20/ton to $100/ton.
Apart from the supply side, the firm sentiment in India and China’s local PVC markets has also contributed to the firmer expectations although the resurgence of COVID-19 cases stir concerns in the regional countries.
Tightness continues to step forward
Availability issues, which have been the main supporter of PVC markets in Asia for the past couple of months, are likely to continue considering the plant shutdowns in the region throughout the July-August period.
Among those undergoing turnarounds are Taiyo Vinyl’s 90,000 tons/year plant in Japan and Formosa Plastics Corporation’s 458,000 tons/year Mailiao unit in Taiwan.
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India’s local PVC market hits 10-month high
Two local producers in India have approached the market with INR2000/ton ($30/ton) hikes this week by citing the low inventory levels.
“Despite the monsoon season, demand inside India has been robust. Our latest hike has seen acceptance from buyers. We think the strong supply-demand fundamentals in India will support the major producer’s anticipated September hike,” a source from one of the companies opined.
Following these hikes, PVC K67-68 prices on ex-warehouse India basis have reached their highest levels since early October 2019, according to the weekly data obtained from ChemOrbis Price Index.
Rising futures support China PVC market
After a week-long break, the stable to firmer trend in China’s local PVC markets that kicked off in late April has resumed recently. Prices have been supported by stronger Dalian futures coupled with expectations of stronger demand amid the approaching high-season for PVC applications in September.
September PVC futures on the Dalian Commodity Exchange posted a notable weekly gain of CNY200/ton ($28/ton) as of August 4, triggered by China’s positive economic data.
“The Chinese government’s announcement on a new infrastructure project and plans over a more flexible monetary policy in the second half of the year have boosted construction activity,” a trader also explained.
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