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It is around the time that major International producers would announce fresh PVC offers for the new month and Asian players started discussion about the likely price direction. There are some rumors that new offers might increase $10-20/ton from last month while other strongly opposed this possibility pointing to unsupportive market condition.

Supporting the notion of firmer July prices, several suppliers are citing reduced export allocation from USA after plant outages and possible improved demand in China and Muslim countries in July. A Southeast Asian producer said, “There are no other environmental compliance inspection scheduled for July, which means converters might be able to ramp up production rate. Besides, customers from Muslim countries could also replenish or the post Eid-ul-Fitr term.”

However, many other buyers are following closely the recent development in the upstream market, in which both ethylene and VCM have fallen to multi months low levels on weak demand and lengthy supply. “Cost wise, it is unlikely that prices could firm up. Demand wise, India market in entering the monsoon season, which might discourage any aggressive stance in replenishment. Support for higher prices is rather limited,” an Indian buyer commented.

In fact, several suppliers have been complaining about the difficulties they face in attracting Indian buyers in recent weeks amid the impending implementation of the GST and also the expected monsoon season. Another buyer added, “International suppliers are checking on market respond after major local producer lifted domestic prices by $15/ton in the previous week. There could be some attempt to close the price gap between local and import offers, however, we are not seeing great acceptance toward higher prices.”

While it is still uncertain on whether market could move north in July, Asian PVC sector remains very much stable this week. Local supply in India might improve in the near term as Reliance is planning to bring its 315,000 tons/year PVC unit on-stream this 14 June after 20 days maintenance work. Supply-demand dynamic might loosen as a result.