Will PVC demand support further hikes for April in Asia?
In India, players expect the producer to raise its offers for April by $20-30/ton pointing to the start of the high season. The delay in the Taiwanese major’s announcement was attributed to the collection issues in India. Buyers also reported that demand is not as strong as it was during the same period of last year given ongoing cash constraints, poor government spending and tight budget for this year.
However, players in Southeast Asia are uncertain as to whether there will be further increases or not. Demand from Southeast Asian buyers remains sluggish while the weakening trend in the upstream oil, naphtha and ethylene markets has gained more prominence in setting the tone of the market recently. “We heard that the Taiwanese major may issue higher prices to India but may roll over to Southeast Asia,” commented a regional producer.
Similarly in China, April offers from the Taiwanese major are expected to be revealed higher, although players are expressing concerns about buyers accepting higher prices. A trader commented, “We are not purchasing any import cargoes as local prices are more competitive. Although PVC markets in the US and Europe are following a firming trend, we think China’s import PVC market will no longer absorb further hikes.”
China’s Premier has also recently admitted that China’s 2017 target GDP growth rate of 6.5% will not be easy to reach in the face of the risks in the financial sector as well as a rise in protectionist policies after the country’s economy grew by 6.7% in 2016.
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