PVC sentiment bearish ahead of Oct announcements in Asia

Sept. 14, 2018

In Southeast Asia and India, sentiment in the import PVC markets remained weak due to persistently tepid demand amid the influx of US cargoes as well as the further depreciation of regional currencies against the US dollar. Players voiced mostly soft expectations for October.

In India, overall import PVC k67 prices for Taiwanese and Korean origins were stable from last week to be quoted at $940-980/ton CIF, cash. American k67 prices continued to show up below the low end of this range at $830-880/ton CIF, subject to different anti-dumping duties ranging from $30/ton to $115/ton. These levels were not included in the price index. A trader said, “The market continues to face pressure from the increasing number of attractive US offers. Players’ concerns about the currency depreciation are contributing to the weak state of demand. The near-term outlook is soft.” The Indian rupee sank to a record low against the USD on September 10, which is likely to push local producers to lift their domestic offers over the short term. The weaker rupee will also discourage more buyers from securing import cargoes, several players concurred. “We expect a major Taiwanese producer to reveal its new prices with slight decreases next week,” a trader noted. Overall expectations for the major producer’s October pricing called for decreases of around $10-30/ton.

In Southeast Asia, the overall range for import PVC k67 prices, which includes Chinese and Taiwanese origins, was stable to $10/ton lower on the week at $910-940/ton CIF SEA, cash. Competitive offers for US k67 were at $860-870/ton CIF Malaysia and at $870-900$/ton CIF Vietnam, which were not included in the price index. A Taiwanese producer said, “We heard that PVC offers on FAS Houston basis have recently increased by $10-20/ton from last week to $780-800/ton. However, US PVC is still offering almost $100/ton lower levels when compared to Asian origins.” Acetylene-based PVC offers from China, meanwhile, were down by $10/ton from last week at $900-940/ton CIF, cash.

Expectations about a major Taiwanese producer’s October PVC prices mostly center on decreases of ranging from $10/ton to $30/ton. Local prices stand below the import markets given weaker regional currencies. The increasing number of US offers and lower export prices from China also contribute to bearish sentiment. In India, players expect demand to pick up by around late September in line with the end of the monsoon season. In Southeast Asia, meanwhile, media sources reported that Super Typhoon Mangkhut is heading toward the Philippines before striking Taiwan. Demand might be negatively affected by the typhoon next week.