- Local and import PVC offers were on a downtrend, decreases recorded between $160-190/ton
- Demand was sluggish, except from the pipe sector in Thailand
- Philippines’ GenChem shuts PVC plant as long as the Philippines is on lockdown
Local and import PVC prices in the Southeast Asia market were on a downtrend in April. At the beginning of the month, local offers in Thailand stood at THB 28,000/ton ($862/ton) on cash, FD Thailand basis and excluding 7% VAT or THB1,000/ton ($31/ton) lower than March delivery offers. In the week commencing April 6, the offers dropped by THB500/ton ($15/ton). Another downward adjustment by THB1,000/ton ($31/ton) was recorded in the week commencing April 20. Therefore, in this particular week, local PVC offers in Thailand for April delivery stood at THB2,500/ton ($77/ton) lower than March, SSESSMENT.COM noted. In the first half of the month, local PVC offers in the Philippines remained stable on a weekly comparison between PHP55,000-56,000/ton ($1,086-1,105/ton) on cash, FD Philippines basis and including 12% VAT. As the Philippines market became standstill and local producers’ plants were shut, no offers were available in the second half of the month. Detailed information for Indonesia and Vietnam market is available in MonthlySSESSMENTS of the respective countries.
For imports, on April 3, market players informed that PVC cargoes of Japan origin were sold between $750-760/ton on LC at sight, CIF Malaysia main port basis. The deal level was $60/ton lower than the offer given in the last week of March. In the week commencing April 6, no import offers were reported to SSESSMENT.COM as most market players were waiting for May shipment offer announcement from the leading Taiwanese PVC producer. A week later, unofficial offers from Japanese producers for May shipment stood between $650-660/ton on LC at sight, CIF Southeast Asia main port basis. After the leading Taiwanese PVC producer dropped May shipment offers by $160/ton compared to April shipment, Thai and Indonesian PVC producers also trimmed offers by the same amount. A Japanese PVC producer made more significant downward adjustments on offers to Southeast Asia, by $190/ton compared to the same period. Despite the hefty reduction in prices, the number of deals concluded were limited. In the last week of the month, a Thai PVC producer concluded deals in the Malaysia market between $15-20/ton lower than the initial offer levels while another Thai PVC producer provided room for negotiations up to $10/ton.
The measures taken by Southeast Asian countries to curb COVID-19 spread hit the PVC market hard. Demand for PVC in the region during April was sluggish amidst lockdown and restrictions imposed. In Malaysia and the Philippines, most producers and manufacturers were forced to halt productions or reduce operating rate. In Malaysia, demand for PVC declined up to 90% as only 30% of PVC manufacturers received approval from the government to continue production at maximum 50% production rates. Among the 30%, there are manufacturers that kept the factories shut due to slow sales and high inventory of finished products. In Thailand, good demand was only reported from the pipe sector as the government kept projects to overcome the drought going. In the production sector, Philippines’ General Chemical & Resins Consortium Inc (GenChem) told SSESSMENTS.COM that the producer’s PVC plant located in Rosario, Cavite, Philippines with a capacity of 20,000 tons/year will remain shut as long as the Philippines is on lockdown. Thailand’s SCG clarified that the company did not have any issues with the VCM plant, but the producer did not rule out possibilities for lower production rate ahead due to the drought in the country.
Pertaining to the outlook, market players contacted by SSESSMENT.COM opined that PVC demand in the region will not improve at least up to June. Hence, offers for May delivery and June shipment should decrease further.
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