- PVC offers in local and import market captured on an upward trend
- Demand was subtle, supply was quite limited
- Local PVC prices in February will move higher, while demand expected to remain soft
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SSESSMENTS.COM data showed that local and import ethylene-based PVC offers within the Southeast Asia market captured on an upward trend in January 2020. In the domestic market, January delivery offers from the local PVC producers in Indonesia increased by $10/ton following the international market trend. In Thailand, the local PVC producers raised offers between THB500-1,000/ton ($16-32/ton). Likewise, local producers in the Philippines increased offers by PHP1,000/ton ($20/ton), but deals were mostly concluded at PHP500/ton ($10/ton) lower than the initial offer level. Similarly, Vietnamese PVC producers applied an increase of between VND200,000-400,000/ton ($8.5-17/ton) on January delivery offers. All changes compared to December delivery offers.
In the import market, SSESSMENTS.COM noted that the leading Taiwanese PVC producer announced February shipment offers with an increase of $20/ton, stood at $860/ton on LC at sight, CIF Southeast Asia Main Port basis. The announcement was released on January 7, earlier than the initial schedule of January 13 in a bid to lift market sentiment, especially India. For regional cargoes, February shipment offers from a Thai PVC producer to Malaysia surfaced with an increase of $20/ton, stood at $895/ton on LC at sight, DAP Malaysia basis. Meanwhile, a trader in Indonesia reported receiving February shipment offers for Thai PVC cargoes at $40/ton higher. For PVC cargoes from the leading Indonesian producer, the February shipment offers stood between $865-870/ton on LC at sight, CFR Southeast Asia Main Port basis, or $20/ton higher. All offers compared to January shipment’s levels.
Overall, demand for PVC resins in Southeast Asia market in January can be considered as subtle. Market activities in the first week of the month were not that active after the New Year holiday. Likewise, trading activities in the region, especially in Vietnam and Malaysia were flat during the second half of the month due to Lunar New Holiday. Additionally, a sudden surge in crude oil prices following the US attack on Iran’s top security and intelligence commander on January 3 did not have a significant impact on the PVC market. No significant improvement in buying activities in Southeast Asia PVC market noted by SSESSMENTS.COM following the issue. Satisfactory demand only reported by Thai and Philippines market players, citing that sales for PVC pipe provided support for PVC resins demand.
On the supply side, market players reported to SSESSMENTS.COM that allocation from the leading Indonesian PVC producer was limited, particularly to the export market. On the production sector, there was a minor problem at Philippines’ GenChem PVC plant on the week commencing January 13. The company’s 20,000 tons/year PVC plant located in Rosario, Cavite, Philippines could not produce the right particle size; hence the producer decided to reduce the operating rate by 40% from the normal capacity. The plant resumed production on December 28, 2019, after it was previously shut on December 6 for turnaround maintenance. Meanwhile, PVC unit of Thai Plastic and Chemicals, a subsidiary of SCG Chemicals Co., Ltd was brought on-stream on January 5 following maintenance shutdown on December 26. The PVC unit with a capacity of 530,000 tons/year is located in Map Ta Phut, Rayong Province, Thailand.
Entering February, demand for PVC resins in most countries within the region is expected to remain on a soft note as demand for end products is not so encouraging. However, most players believe PVC prices in the region would remain on an uptrend in line with the international market trend. Thai PVC producers have planned to raise February delivery offers between THB1,000-1,500/ton ($32-48/ton) from January delivery. Likewise, the leading Indonesian PVC producer hinted to increase the upcoming offers, yet the exact amount is still under consideration; depending on ethylene prices, their inventory level, and price changes in the global market, SSESSMENTS.COM noted.
