Traders cut PVC offers to S. Asia ahead of January price announcement

After five consecutive months of price increment, Southeast Asian buyers this week reported to have received lower offers for PVC from international suppliers. This takes place just a week before the Taiwanese major would normally announce new prices, deepening market concern over a possible down trend.

A Malaysian trader informed, “Earlier this week, our Chinese supplier was still maintaining ethylene based PVC offers at $970/ton CIF term; however, face stiff resistance. Today, the maker has stepped back on their offers by $35/ton. Such move could be due to falling local demand in China, and this is very risky.”

A pipe converter received Chinese ethylene based PVC at $935/ton CIF, LC AS term said, “Our supplier is open to negotiation. This offer is about $25/ton lower than last week for the same material. We think traders are loosing confident about the near term outlook, therefore cutting prices to speed up sales. We plan to only buy on need basis.”

A Vietnamese converter said, “One of the Taiwanese producers is offering at $935/ton CIF Vietnam, LC AS term; however, we decided to buy USA cargoes at $870/ton with the same term. Market is going down. Our end product business is a little weaker, in addition to the depreciation of the Vietnamese dong, we could not afford to purchase cargoes above the $900/ton threshold.”

Southeast Asian market has been weak over the past several months compared to other neighbouring markets. However, at the moment, the high demand season in India is badly dampened by the demonetisation while China is entering the off-peak period. Together with the presence of low priced USA cargoes, Asian suppliers are not having sufficient support to increase their offers to recoup higher costs. Market is awaiting January shipment offers.