Asian players expressed expectation on PVC offers for May shipment

It is this time of the month that a major Taiwanese producer would announce fresh offers for the new month and Asian players are discussing the possible trend for May shipment. A considerable number of buyers in the region are expressing expectation for lower prices for the coming month pointing to persistent sluggish condition in India.

In fact, local producer in India recently slashed prices by INR3000/ton ($46/ton) bringing domestic prices to $965/ton EXW India, excluding VAT and excise tax, cash term. An Indian trader commented, “International suppliers would have to match the reduction in order to conclude deals. We have yet to see any improvement in term of demand while cash-flow issues would still be the main hurdle at the moment.” Several have called for at least $70-80/ton drop from last month at $930-940/ton CIF India, LC AS term with a market source added, “Anything higher than this levels would gain no support from buyers and shall fail like in previous month.”

With slower than expected demand condition in India, Southeast Asian buyers are sharing similar view that May shipment offers might be softer. “Especially with carbide based PVC stands below the $800/ton threshold while Chinese ethylene based PVC dropped about $30/ton week on week basis. To make the matter worse, local inventory is high in Vietnam, and therefore, even at stronger energy and ethylene costs, we believed that prices shall soften,” a Vietnamese buyer said.

There are market talks that major Taiwanese maker are having at least 20,000 tons of material unsold in April to bring forward to May, which players believed that could resulted in higher inventory pressure.