Players: PVC market is set to move higher

The Asia PVC market has been steadily following the stable to firmer trend over the past two weeks after Taiwanese major implemented hike on their offers. At the moment, most deals for February shipment are concluded and market again await March offers. Players are generally expecting firmer prices considering the current supply and demand condition.

Looking at the upstream market, ethylene costs based on CFR Northeast Asia term added another $25/ton on the final trading day of the week, totalling a hike of $65/ton week on week basis. As a result, EDC costs in Asia have also been pushed to 19 months high this week. Meanwhile, it is reported that VCM availability in the region is limited due to several plant shutdown and this condition might persist in the coming month.

In the downstream PVC market, though many players in China and Southeast Asia are still away from their desks for Lunar New Year holidays, it appears that buying interest in India remain healthy. An Indian trader commented, “The availability of ready cargoes at the moment is still tight and we continue to received purchase inquiries from converters. Demand condition is reviving from the recent cash crisis though market still needs time to fully come back. We expect at least $20-30/ton hike in the new offers from international suppliers for March shipment.”

A carbide-based PVC from China has also confirmed receiving better number of enquiries from Indian buyers, yet prefer to monitor further before open new offers. The source said, “Our production costs have increased rapidly due to strict environmental regulation and for this we plan to lift our offers to protect profit margin. Domestic ground is still quiet since buyers are not back from holiday yet, therefore we would wait for a while before announcing fresh offers.”