- Most businesses resumed operations as the government lifted the lockdown on April 30
- Rainy season in the country dampened PVC demand in Vietnam
- Market players express a cloudy outlook for PVC prices
Local ethylene-based PVC offers in Vietnam continued to shift following crude oil prices and international trends. On the week commencing May 4, some converters stated that they have yet to receive fresh local PVC offers from local producers as the companies were still on the Reunification and Labor day holidays. However, by May 8, some producers have closed offers or sold out May delivery allocation between VND15,800,000-17,000,000/ton ($678-730/ton). In the following week, a local PVC producer managed to secure a deal at VND100,000/ton ($4/ton) lower from the initial offer level at VND16,900,000/ton ($725/ton) on cash, 30 days credit term and excluding 10% VAT. While on the week commencing May 18, SSESSMENTS.COM noted that there were no offers available as the local producers and traders in the country are waiting for the price announcement from the leading Taiwanese PVC producer. Market players opined that if the leading Taiwanese PVC producer adjusted up the offers, local PVC offers in Vietnam will also increase by VND500,000/ton ($21/ton) compared to April delivery. In the last week of May, as the crude oil and VCM prices were on an uptrend, some traders express firm sell idea for local ethylene-based PVC between VND17,500,000-18,000,000/ton($751-772/ton) on cash, FD Vietnam basis and excluding 10% VAT.
In the import market, SSESSMENTS.COM’s pricing database showed that June shipment offers for US PVC cargoes increased by $30/ton from May shipment. Deals for these cargoes were concluded at the same level to the initial offers at $630/ton on the week commencing May 11. While for other origin, deals for June shipment PVC offers from a Japanese producer concluded at the same level to the initial offers at $690/ton. As for Taiwanese cargoes, the leading Taiwanese PVC producer announced June shipment’s offers to the Southeast Asia market, including Vietnam. The offers increased by $40/ton compared to May shipment. In the final week of May, a local converter purchased Taiwanese ethylene-based PVC cargoes $10/ton lower than the initial offers or at $670/ton on the same payment and delivery term. All import offers were on LC at sight, CIF Vietnam Main Port basis.
As the government lifted the lockdown on April 30, market sentiment in Vietnam was gradually improving. Most businesses resumed operations from a month-long closure. However, despite the bullish market sentiment, no improvement was seen in the PVC market as the converters remain cautious in procuring materials and only purchase on a hand-to-mouth basis on the back of market uncertainties amid a challenging global economy over the pandemic crisis. Moreover, the rainy season in the country has dampened PVC demand even more. In contrast, a raincoat manufacturer stated that the company's end-product demand was healthy, as the rainy season is the high season for raincoat. On the supply front, no supply issues were reported to SSESSMENTS.COM.
Looking ahead, Vietnamese market players opined to SSESSMENTS.COM that PVC demand will remain weak in the upcoming months in line with slow finished product demand. However, demand for PVC-based rain apparel is expected to remain healthy as the rainy season usually lasts until October. In terms of prices, market players express a cloudy outlook for PVC prices as crude oil and feedstock price movements are unpredictable.
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WeeklySSESSMENTS: Vietnam PVC Prices W/C May 4
WeeklySSESSMENTS: Vietnam PVC Prices Week Starting May 11
