Asian players: Regional PVC market might track stable trend in the near term

As major overseas sellers have mostly concluded businesses for August shipment, regional players started discussing the possible PVC market outlook in September. Despite the escalated trade war between China and the USA, Asian players remain relatively positive about the near term market outlook citing the support from tightening supply. 

Sources believed that a major Taiwanese producer might have overdone August shipment offers by cutting prices by $40/ton from the previous month. Apparently, there have been reports that the maker has oversold the allocation to India market as a result of competitive prices.

“We think there is a low possibility that major Taiwanese producer would cut prices again for September shipment. Especially with the upcoming maintenance shutdown,” an Indian distributor commented.

In fact, Formosa Plastic Corporation is planning a 17 days maintenance shutdown at one of its PVC lines in Mailiao plant. The 500,000 tons/year unit is scheduled to go offline starting 10 September 2019. 

Meanwhile, the market might see less supply from Chinese suppliers in the coming month as a number of carbide and carbide-based PVC producers are ordered to lower or even shut down in August and September as the country pushes efforts to improve air quality ahead of the National day. 

“We are monitoring the currency exchange rate situation as this might downplay producers' effort to maintain offers stable for September. Besides, it is the monsoon season in Southeast Asia, hence there is no real support for any increases,” a market source added.