Domestic PVC demand in Indonesia may decline further as the government has imposed large-scale social restrictions on another big city in an attempt to curb a further spread of Coronavirus. An Indonesian trader informed SSESSMENTS.COM that production that runs in Surabaya, the second-largest city in Indonesia, will be affected by the enforcement of large-scale social restrictions (Pembatasan Sosial Berskala Besar/PSBB) which was approved by the central government on Tuesday, April 21. Surabaya and its neighbouring cities, Gresik and Sidoarjo, are likely to start PSBB between Saturday-Monday (April 25-27) with the enforcement period to be announced at a later time. The trader also told that their sales for PVC cargoes in March had declined by 18% as compared to the same period last year. While in April, the sales have decreased by 50% and may worsen by the absence of orders from converters as the large-scale social restriction is expanded to other big cities in the country.
According to the source, demand for converters’ end-products, such as roofing and gardening hose, is sag following slow sales in the retail market. As reported to SSESSMENTS.COM, high demand for the converters’ end-products is coming from the retail market, but this sector is currently experiencing as a significant decrease in sales amid the Coronavirus pandemic. Additionally, converters’ order then will not recover while almost all infrastructure projects from the private sector are not running amid the current condition. Due to low demand and market uncertainty, the trader also heard that converters would stop production during the Eid Al-Fitr holiday even though the government has moved the furlough to December.
Speaking of May shipment offers from the leading Taiwanese PVC producer which surfaced with a reduction of $160/ton from April shipment, the trader expects it will help manufacturers to minimize their production costs on the back of slow sales due to Coronavirus-induced global downturn, SSESSMENTS.COM was told.
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