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India’s PVC sentiment still bearish despite season

Oct. 09, 2018

In Southeast Asia and India, the weak sentiment has intensified with an Indian producer’s price cut on its local PVC offers this week. Defying the end of the monsoon season and surging energy prices, overall demand has remained weak recently.


In India, a local producer cut its PVC prices by INR3000/ton ($41/ton) as of October 1 and withdrew its price protection. “Lower prices came in line with comfortable supplies and bearish market sentiment. Despite the end of the monsoon season, buyers remain sidelined since they are waiting to get a clearer picture of the market amid ongoing currency issues,” said a trader. In plant news, Finolex Industries Limited restarted its PVC and VCM units last week after maintenance.


The overall range for import PVC k67 prices on CIF India, cash basis was quoted at $830-920/ton, which posted decreases of $30/ton on the low end and $10/ton on the high end on a weekly basis. Offers for Taiwanese k67 stood at the high end of the range while US offers continued to form the low ends by emerging below the $850/ton CIF level. Visibly lower October PVC prices in Asia coupled with the depreciating rupee dragged US offers down, traders noted. Meanwhile, offers for Korean, Russian and Ukrainian k67 also saw weekly drops of $10-20/ton and moved below $900/ton CIF.


In Southeast Asia, overall import PVC k67 prices for dutiable and non-dutiable origins stood at $820-880/ton CIF, cash. The range did not record any major changes on the week. A few Asian producers applied small hikes on their offers, yet they met with regional buyers’ resistance. A buyer in the Philippines opined, “We believe that sentiment in Asian PVC markets will remain weak until demand in India starts to pick up. There are quite competitive offer levels for US origins in the market. Hence an Indonesian producer’s slight hike attempt did not attract buyers’ attention.”


Within the region’s local markets, the weekly averages of PVC prices in Vietnam, Malaysia and the Philippines hit their lowest levels since around early 2018, data from ChemOrbis Price Index showed. An Indonesian producer cut its October offers by $70/ton, saying, “Demand is not bad after our reduction.” A producer in the Philippines reduced its new offers by $90/ton from last month. “Buyers are accepting our new offer levels as they need to replenish their stocks for Christmas preparations. The depreciation of the peso is keeping them away from the import market,” a producer source said. In Thailand, converters reported receiving local offers with decreases of THB2000/ton ($62/ton).


Players are not feeling optimistic regarding the near term outlook as demand remains muted in India despite the end of the monsoon season. “Currency issues might keep buyers on the sidelines of the import market for another month,” a trader opined. On the other hand, local demand in Southeast Asia is slightly picking up and domestic offers are not expected to witness any further losses for now.


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