US tariffs upset bullish expectations in Asian PVC markets

PVC markets in Asia have shifted into a softening mode, dashing earlier bullish expectations for prices to extend their recovery after a prolonged downtrend. The shift comes as the US imposes sweeping tariffs on imports from across the globe, dampening sentiment and demand outlook across major Asian markets.

Just a week ago, sentiment was optimistic, with many players increasing procurement activity in anticipation of price rebounds. Buyers were eager to secure volumes at what they believed were bottom-level prices.

However, demand has certainly seen a downswing this week, especially in India and Southeast Asia, with prices seeing a definite softening. While import PVC K67 prices have fallen by $10/ton in India, they have been noted $5-10/ton lower in Southeast Asia. In China though, import prices have been mostly stable.

Crude oil declines add to bearish outlook

Meanwhile, since the tariff announcement, crude oil prices have seen a sharp decline, driven by fears that the global economy, particularly trade between major economies, may slow down, which could lead to reduced demand for oil.

This decline could ripple through downstream markets, potentially reducing feedstock costs and further weakening demand for polymers, including PVC.

Ample availability in US?

Signs of prices trending downwards were available early in the week when a trader sold a US shipment to the Middle East at a fairly low price of $710/ton CIF Jebel Ali, with the netback to the origin worked out at about $640-650/ton FAS US Gulf. This is significant as the current posted prices are thought to be in a $670-680/ton FAS range.

“This points to ample availability in the US Gulf and this may affect import prices across Asia and the Middle East. In fact, we expect shipments from Houston to hit Turkish and Asian destinations shortly, keeping prices lower in the weeks ahead,” said an Indian trader.

India sees price cuts across origins

As far as India is concerned, Chinese-origin PVC at the low end of the assessment range, was seen falling to $670/ton CIF, down by $10/ton from the previous week. At the high end were Japanese-origin shipments noted at a duty-free price of $765/ton, equivalent to $710/ton for dutiable shipments. Meanwhile, a small Taiwanese player is also thought to have reduced its price from $720-730/ton in the previous week to $710/ton CIF India in the current week. The high end of the current range is still higher than a major Taiwanese player’s benchmark price for April at $700/ton CIF.

“Demand sentiment has suddenly turned bearish this week as a result of the US tariffs. There seems to be a belief currently that prices may still have room to fall after all in the weeks ahead,” another PVC trader added.

US PVC sales to China expected to fall

In China, a major trader expected Beijing’s decision to impose an additional 34% tariff on US imports to lead to a significant decline in US sales volumes to China. “We see the new tariffs triggering a broader adjustment in the global supply flows,” he added.

The Chinese retaliation came after the US introduced an extra 34% tariff on Chinese goods, taking the total tariff to 54%. The US president also shut down a loophole that had been letting China’s low-value packages into the US without paying customs duties.

At the same time, a Chinese producer said domestic prices of both carbide and ethylene-based PVC have slipped on global economic worries because of the US tariffs. “Demand remains bearish. Downstream factory operations are still at reduced rates because of poor downstream demand and prices. We’ve maintained our FOB offers at $610-620 this week,” he added.

A PVC converter said although PVC futures in China fell sharply on Monday, import and export prices have mostly remained stable. “But demand has stayed weak. We’d rather stay on the sidelines and wouldn’t like to make any outlook comments at the moment,” he added.

SEA buyers balk at current prices

In Southeast Asia, especially in Vietnam, buyers are holding back. A local trader said, “Most of my customers are expecting a $30–50/ton decline next month due to falling crude oil and the impact of US tariffs. We anticipate a significant demand drop, particularly in the PVC flooring sector.”