Taiwanese major sold out January PVC shipment to India, uptrend might persist

Soon after lifting January shipment offers by $20/ton from last month to $910/ton CIF India, LC AS term, a major Taiwanese producer reportedly sold out all allocated quantity to this market without any hassle. There have been market talks that the producer has smaller allocation to India compared to last month. For December delivery, a total of 25,000 tons allocation was sold in India.

Sources are expressing expectation that the current firming trend might persist in months to come, considering the traditional high demand season in India starting January. “Market outlook for the first quarter of 2018 is very bullish, which explained to the aggressive purchasing activities this time,” a trader said. The source, however, added a potential risk that end product businesses might not recover in full and quick as expected since many companies are still struggling in the post GST term. “In this event, supply in India would become bloated by February and this is the least desirable condition for any traders or stockist.”

Other industry participants are expecting the firming trend to spread throughout April or May 2018, adding the lack of Chinese materials besides the improving demand in India. “Chinese government might continue to emphasise on the environment issues, which means Chinese PVC makers, especially carbide based PVC, have limited room to maximise production rate,” a source commented.

Players have not taken the demand prospect in China in the coming month when assessing the trend. Local PVC market in China surged twice last week, yet it was very much speculative based on strong May delivery futures on Dalian Commodity Exchange. Buying interest in this market might fade ahead of the long Lunar New Year, which add more weight to the above-mentioned risk. No major scheduled maintenance shutdowns are reported in the first quarter 2018.