- April delivery offers from Indonesian PVC producers dropped $50/ton
- Indonesian producers slashed production rate amid slow demand
- Converters are planning to halt the production activities until early June
On the week commencing April 6, SSESSMENTS.COM noted April delivery offers for ethylene-based PVC from several producers in Indonesia surfaced with a reduction of $50/ton compared to March. Some deals were concluded at $870 on cash, FD Indonesia basis, and excluding 10% VAT, equivalent to IDR13,050,000/ton in local currency as the suppliers were offering special currency rates at IDR15,000 per US Dollar. In order to lure buyers, some suppliers were even willing to give below IDR15,000 for the currency exchange rate. However, some buyers were still not interested in procuring on the back of sufficient inventory. On the week commencing April 20, one of the local producers decided to adjust down their offers again by $20/ton on the low-end range as compared to offers at the beginning of April.
In the import market, SSESSMENTS.COM’s data showed that there were no fresh offers captured in the country during the first half of the month as most players were still waiting for May shipment offers from the leading Taiwanese PVC producer at that moment. After the leading Taiwanese PVC producer announced their May shipment offers with a $160/ton decrement, some players commented that such a level was quite attractive. Yet, considering the pandemic situation, buyers were unable to accept the prices. In late April, some buyers reported cancelling orders for Chinese acetylene-based PVC cargoes that just arrived at the port since the offers at that moment were much lower.
As reported to SSESSMENTS.COM, demand for PVC during April was shrinking significantly as the big-scale social restrictions were imposed on several big cities in the country. Indonesia’s Standard Toyo Polymer mentioned that demand on their side decreased by around 50% compared to last month. In order to offset the demand, the producer decided to slash the operating rate at its 82,000 tons/year PVC plant by 20% from the normal capacity. Similarly, Indonesia’s Sulfindo reportedly has cut the production rate owing to the slow demand. However, no further information regarding the current operating rate. Some converters were also running at below 50% from the normal rate, even some others have already shut their factories. Additionally, the leading Indonesian PVC producer was considering to divert cargoes to China due to sluggish demand in the domestic market as well as other Southeast Asian countries.
In the near future, the majority of market players contacted by SSESSMENTS.COM believe that the Indonesia PVC market will undoubtedly remain muted. Cited that some companies decided to cease their production activities starting from May 21 for Ascension Day followed by Eid Al-Fitr celebration on May 24-25 even though the collective holiday has been moved to the end of the year. Likewise, most converters decided to halt production until early June owing to the weak demand. Besides, as there was no clarity regarding the regulations in the logistics sector, Indonesian PVC market players opined that it is better to wait on the sidelines.
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