Will PVC market in India, SEA respond to firming in China?
In China, PVC prices were supported by not only futures but also reduced supply levels and a slight improvement in demand. Supplies are reduced due to shutdowns and a new round of environmental inspections while demand improved thanks to downstream buyers’ replenishment activities upon recent increases.
In India, however, a pipe manufacturer said, “Demand remains stagnant as it will take time to digest the newly implemented taxation system; however, the monsoon season plays a more prominent role in justifying the current state of demand. We will be closely watching local Indian and Chinese markets.”
A Chinese PVC producer confirmed, “In our export destinations, there is no inquiry from the Indian market. Although we received more inquiries from Southeast Asia, buyers in that region are holding their purchases when their bids are rejected. Therefore, we focus on selling in the local market, where inventories are not high and buyers are engaging in more stock replenishment.”
In the midst of these divergent trends in the two main regions, early expectations for August have started to be voiced. Taking support from the uptrend in China’s local market and the signs of a rebound in crude oil prices, some players revealed firm expectations regarding a Taiwanese major’s August announcements, which are expected to come earlier this time. Increases of $20/ton are pronounced for the upcoming announcement. Others, meanwhile, expect rollovers considering lower upstream costs and the state of demand in other regions.
A converter from Thailand reported that demand has been subdued this year even before the rainy season began, adding, “Prices will remain stable or rebound slightly as producers might take some measures to limit continuous price decreases. We believe that developments in China will affect the sentiment in Southeast Asian markets.”
The Taiwanese major followed a stable pricing strategy in June and July businesses after giving away $80/ton decreases in May. The producer had to step back from its hike targets in April and conceded to rollovers after applying increases of $30-40/ton in March and $20/ton in February.
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