Market sources informed SSESSMENTS.COM that the leading Taiwanese PVC producer revealed sell ideas for May shipment. According to the sources, the producer’s sell ideas are at $620/ton on LC at sight, CFR China and at $630/ton on CFR Southeast Asia main port basis. Therefore, the reductions would be between $190-200/ton compared to the official offers for April shipment to both markets. Compared to the lowest offer given by the producer to converters, the decrease will be $150/ton.
Market players opined to SSESSMENTS.COM that such huge decreases are considered reasonable due to slow demand and low feedstock prices. As of April 14, spot VCM prices stand at $390/ton on CFR Northeast Asia. Compared to the prices at the beginning of April, the current level is $50-60/ton lower. In addition, market talks have it that a much lower deal has been concluded in the China market for ethylene-based PVC cargoes from India. The cargoes were sold at $590/ton on LC at sight, CFR China main port basis.
So far, there is no information about the exact time of the offer announcement from the producer. One of the sources highlighted another possible scenario applied by the producer for May shipment. The source mentioned to SSESSMENTS.COM that the producer may just ask buyers to place bids and negotiate based on the bids received.
There is no indication regarding May shipment allocation from the producer, SSESSMENTS.COM was told. Market talks have it that the producer has reduced the operating rate due to the Coronavirus outbreak and lockdown in many countries across the world. Market sources predict that it will be difficult to achieve sales targets and possibly only 20-30% of the producer’s allocation could be sold.
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