New PVC offers might delay, increased expected

It is the time of the month when major Taiwanese producer would announce fresh PVC prices for the new month; however, regional players are expecting a slight delay this time as most Indian companies are off for religious and National day. However, market is looking at additional price hike for September shipment given healthy demand in China and tightened supply from major international producers.

New offers might come later this week or earlier next week with $30-50/ton increased, player said. “Healthy demand in local China market discourages export, in which Chinese PVC become very limited in recent weeks. Therefore, despite the traditional off-peak season in India, there is no sign that prices are coming down,” a market source commented.

Another buyer added, “We are not seeing much USA cargoes recently too due to couple of production issues in this country. Looking at the ethylene costs, market seems to have comfortable room for further hike.”

Meanwhile, demand in India continues to remain low with the effect of monsoon season and the recently implemented GST.  A major local producer here announced incentive schemes on domestic PVC cargoes earlier last week with discount up to INR2000/ton ($31/ton). “Yet, we are seeing $50/ton hike on the next offers from major international suppliers,” an Indian buyer added.

Domestic PVC prices in China has been following the up trend over the past eight weeks as strict environmental inspection forced a number of plants to reduce operation rate. This condition might persist throughout the quarter, which would support the general sentiment.