8 Aug, 2018
Following two months of consecutive increases, a major Taiwanese producer is mostly expected to approach the Asian PVC markets with rollovers to slight increases for September.
Players’ expectations are mostly shaped by supply limitations. The major’s allocation to regional markets has been restrained since February. Meanwhile, local PVC prices inside China have been following a firming trend for the past three weeks on the back of stronger futures prices. PVC supplies have also been low in China due to environmental inspections and maintenance shutdowns.
These two bullish factors are believed to counterbalance slow demand from the Indian market given the devaluation of the rupee against the US dollar and ongoing monsoon rains.
In India, a trader noted, “We were informed that the Taiwanese major will probably apply a slight increase of $10/ton on its September PVC offers mainly due to limited allocation.” Another trader also commented, “We expect the major producer to announce rollovers for September as slow demand from the Indian market will be offset by firmer prices in China and the major’s limited quota.”
In China, a source from an ethylene based PVC producer opined, “We lowered our offers to export markets by $10/ton this week as buyers in India are showing resistance to firmer prices. However, we heard that the major producer’s September offers will indicate rollovers to slight increases based on the uptrend in China’s domestic market and low allocation.”
In Malaysia, a trader also said, “The Malaysian PVC market is soft given the depreciation of the ringgit. We heard that the September pricing may indicate rollovers from August.”
On the other hand, some players in India speculated that any hike attempts will be hard to achieve considering stagnant activities, the monsoon season as well as the emergence of deep-sea cargoes.