- Taiwanese and Japanese PVC producer proceeded with higher offers despite sluggish market
- Demand was slow in general during the month, end product sales suppressed by the lockdown
- PVC prices expected to maintain stable supported by ongoing maintenance shutdown
For the week commencing May 4, SSESSMENTS.COM was told that May delivery offers for ethylene-based PVC from local producers in Thailand captured lower by THB3,000/ton ($94/ton) from April delivery’s level, stood at THB24,500/ton ($769/ton) on 60 days credit term, FD Thailand basis, and excluding 7% VAT. A local converter submitted bids at THB2,500/ton ($78/ton) lower from the initial offer level. However, the bids were rejected as suppliers only willing to give discounts up to THB1,000/ton ($31/ton) for a big volume of purchase. In the following week, the offers were maintained firm at THB24,500/ton ($769/ton) on 60 days credit term, FD Thailand basis, and excluding 7% VAT and done deals were achieved at the initial offer level. Moving to the third week of the month, the offers maintained at THB24,500/ton ($769/ton) with 30 days credit term, FD Thailand basis, and excluding 7% VAT, and done deals were concluded at the initial offer level as well. Meanwhile, in the Philippines, there were no offers reported from the local producers as the company’s plants were shut during May due to the lockdown in the country.
From the import market, a global trading house announced that on the first week of May that the company has sold out May shipment allocation for Indonesian and Japanese PVC cargoes to Southeast Asia market with the deals concluded at $640-650/ton and $620/ton respectively on LC at sight, CIF Southeast Asia Main Port basis. While in Malaysia, sources reported to SSESSMENTS.COM that a converter purchased 200 tons of ethylene-based PVC cargoes from the leading Indonesian PVC producer at $10/ton lower from the initial offer level at $640/ton on LC at sight, CIF Port Klang port. On May 19, the leading Taiwanese PVC producer announced June shipment offers with an upward adjustment of $40/ton from May shipment’s level. Likewise, a Japanese PVC producer decided to increase June shipment offers by $40/ton on a monthly comparison, with the offers stood at $680/ton on LC at sight, CIF Southeast Asia Main Port basis. However, the producer said satisfactory sales was only to Vietnam market with the done deals concluded at the initial offer level.
Market sources reported to SSESSMENTS.COM that PVC demand in Southeast Asia was slow in general during May. The main factor affecting the demand was the slow sales for finished products due to the lockdown to curb the spreading of Coronavirus as well as the high inventory on hand. After the lockdown relaxation, slight demand improvement was recorded by the third week of the month in Malaysia and Thailand following the improvement for finished product sales. While in the Philippines, the main issue for businesses to resume activity is the lack of manpower due to public transportation issues. As reported, some workers in the Philippines have to pay for PHP700 ($14) for a one-way trip when normally it only costs PHP10 ($0.19) per trip using public transportation. Hence, some converters revealed that the company was unable to meet customers’ demands despite the orders received. Further added, market activity in Malaysia was slow in the final week of May following the Eid Al-Fitr holiday. On the supply side, there were no issues reported in the region during May. On the production sector, sources informed SSESSMENTS.COM that Philippines’ General Chemical & Resins Consortium Inc PVC plant with a capacity of 20,000 tons/year remains shut as of May 19 as some issues were found owing to the long shutdown.
For the outlook, the majority of Southeast Asian market players expect that the ongoing maintenance shutdown at some PVC plants in Asia will balance the market and able to maintain the offers firm. However, some sources prefer the sidelines position and only monitor the market movement as the outlook remains cloudy, SSESSMENTS.COM was told.
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WeeklySSESSMENTS: SEA PVC Prices W/C May 4
