US PVC loses competitive edge in Asia
Sept. 21, 2018
A major Taiwanese producer revealed its October PVC prices on Wednesday, applying a decrease of $90/ton to China and $50/ton to India when compared to September. The decrease was mostly expected given the already bearish sentiment across Asia, although its size caught some players by surprise particularly in China.
Over the past few weeks, US PVC cargoes were competitively-priced, standing $100/ton below the Asian origins. This pushed the Taiwanese major to implement a larger-than-expected decrease on its monthly offers, according to many traders.
Plus, Asian markets have already been struggling with currency risks, supply remains comfortable and the ethylene market is hovering around a four-month-low. All of these factors contributed to the downward pressure on the October pricing of the producer.
The new offer levels of the Taiwanese major are now standing close to the US PVC offers reported last week in China whereas they are not as low in India. “The major’s new PVC offers to India are not weighing on the market as much as in China,” said a manufacturer.
Accordingly, US PVC appears to have lost its competitive edge this week. Some Chinese producers have followed the decrease decision in their offers to Southeast Asia while more Asian producers are yet to announce their new levels across the region.
Although demand remains thin, some traders expect it to improve by the end of this month given the end of the monsoon season in India and a week-long holiday in China. The disappearance of attractively-priced US cargoes may also help buying interest rebound, some argued.