Tight supply might push local PVC market higher in Indonesia

As report earlier, domestic PVC supply in Indonesia has been tightening throughout September amid domestic production issues. Suppliers are preparing to announce October delivery offers and many are expressing the intention to lift prices.

A trader sold PVC cargoes at $970/ton FD Indonesia, cash term said, “We are planning to implement $20-30/ton increase for October delivery parcel as domestic producers are not having material at the moment.  Demand started to show signs of improving and we hope market would accept the hike.”

A domestic producer added, “We have oversold over the past two months and currently working to clear the backlog. This has affected our export allocation severely and we are only able to meet requirement from regular domestic buyers now. Market is tight and we are looking at possibility of higher October offers.”

At the meantime, market sources reported production issues at PT. Sulfindo Adiusaha’s VCM line, leading to lower run rate at the downstream PVC line. “This is adding to the already tight market condition and might support firmer trend in the near term,” a source said.

Local PVC market in Indonesia currently stands at $970-1060/ton FD Indonesia, payment 0-60 days.