An Indonesian PVC producer revealed to SSESSMENTS.COM that the company has announced July delivery offers to the domestic market. Following the uptrend in the international market, the producer applied a hefty price increase of $90/ton as compared to June delivery. For medium quantity of purchases around 200 tons, the producer’s offers are available between $860-870/ton on cash, FD Indonesia basis and excluding 10% VAT. Demand-wise, the producer said that the company’s sales for this month up by 20% as compared to last month, currently at 80% of the normal level. Considering current sales and trend analysis, the producer believes that sales will eventually return to positive growth at least until the end of this year.
On the production front, the Indonesian producer has strongly denied the market rumour about production issue stemming from water supply problems. In fact, the producer revealed that the company cut their operating rates to around $80-85% from the normal capacity in a bid to offset the current demand. The move, however, has no significant impact on its supply chain. The producer confirmed that in the second quarter of 2020, production at their sister company in Thailand was curtailed by water shortage, as the country was facing its worst drought in four decades.
The producer also shared the pricing strategy for the upcoming August delivery. The producer indicated that the company will most likely follow the leading Taiwanese PVC producer’s step. Therefore, an increase of between $20-30/ton for the upcoming August delivery might be on the horizon, SSESSMENTS.COM was informed.
