16 May, 2018
A major Taiwanese producer approached Asian PVC markets yesterday with decreases for June. This was the producer’s second decrease implementation since the beginning of 2018. Asian PVC players’ initial expectations for June pricing had been mixed given several divergent factors including the firming trend in China’s local PVC market and the bullish energy complex as well as the approaching monsoon season in India and the depreciation of the Indian rupee against the US dollar.
According to market sources, the major Taiwanese producer announced its June PVC prices with decreases of $20/ton to China and $30/ton to India when compared to May.
Although the producer’s decrease decision was in line with some players’ initial expectations, others were surprised by the move as local PVC prices in China currently maintain their firming trend with the support from low inventories in the midst of planned maintenance shutdowns along with seasonal demand.
In India, a trader commented, “Taiwanese and Korean cargoes were sold well as buyers find their levels reasonable in the midst of high local prices inside China. A Taiwanese major’s $30/ton lower June offers to India have also helped buying sentiment. We think that end-users’ business will slow down by next month given the monsoon season.”
Another trader said, “Two South Korean producers offer at the same level with the Taiwanese major for June. Despite firm crude oil futures and India’s higher inflation, import PVC offers are attractive now as they have not been lower than the prevailing levels since early 2018. The major was able to sell well to India this time.”
In China, a source from a producer opined, “The Taiwanese major’s June pricing surprised us as we think that China’s domestic market will remain stable in the remaining part of May.”
A source from another Taiwanese producer noted, “The major producer’s June allocation is higher from previous months despite an upcoming turnaround. We evaluate this as a sign of a weak outlook for PVC market.”