- Local and import PVC offers showed opposite movement in May
- Lacklustre demand in May has led to high inventory on local producers’ end
- Indonesian market players voiced out a different outlook for pricing
During May, SSESSMENTS.COM’s data showed that local and import PVC offers in Indonesia showed diverse movement. In the local market, May delivery offers from several producers in the country have emerged with a notable reduction of $160/ton compared to April. On the week commencing May 4, some converters managed to conclude deals with one of the local producers at $700/ton on cash, FD Indonesia basis and excluding 10% VAT, with the currency exchange rate at IDR15,000 per US Dollar. At the same time, some converters decided to skip May procurement as they have ceased production until early June due to Coronavirus pandemic. In the import market, June shipment offers from the leading Taiwanese PVC producer surfaced in the Southeast Asia market, including Indonesia, with an increase of $40/ton as compared to May shipment offers. Recorded from May 21, local or import offers were scarce since most market players were on Eid Al-Fitr holiday at that time.
In general, demand for PVC in Indonesia was sluggish throughout May as an impact from the Coronavirus outbreak. One of the local producers highlighted that the state of demand during the month was the worst in history, even worse than the financial crisis in 2008, the company’s sales were only around 15-20% from normal. Similarly, several converters also lamented that their sales were only around 25-30% from normal. At the time, some buyers preferred to purchase on an as-needed basis, while some others remained on the sidelines on the back of slow demand for finished products. Additionally, even though Indonesia government has banned all citizens from traveling to their hometowns for Eid al-Fitr and moved the four-day Eid collective leave to December 28-31 from May 26-29, most converters have decided to shut production from May 21 until the beginning of June, citing that lack of orders to be fulfilled during the period. On the supply front, most producers have high inventory levels as a result of the sluggish demand, SSESSMENTS.COM was told. On the plant news, Indonesia’s Standard Toyo Polymer 82,000 tons/year PVC plant reportedly has been under maintenance shutdown since May 27. Before maintenance was carried out, the producer has also shut the plant on May 23 due to Eid Al-Fitr holiday.
Looking into June, Indonesian market players expressed a different outlook to SSESSMENTS.COM related to prices. Some players opined that the upcoming local PVC offers will likely follow the international trend. However, some others stated local PVC prices will heavily depend on domestic demand. Hence, even though the leading Taiwanese PVC producer increased its June shipment offers, local PVC offers will be rather difficult to follow the same direction considering the weak demand that is expected to remain stagnant in the upcoming month.
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WeeklySSESSMENTS: Indonesia PVC Prices Week Starting May 4
