On Tuesday morning, May 19, market sources informed SSESSMENTS.COM on the latest announcement made by the leading Taiwanese PVC producer for June shipment. On a monthly comparison, offers for June shipment surfaced with an increment of $40/ton to all markets, except India. A discount of $10/ton is applicable for 500 tons and above to all markets. To the India market, the producer’s offers stood at $740/ton-level, no price comparison from May shipment as the producer skipped offering to India last month.
Comments by market players on the subject as follows:
An Indian trader commented, “June shipment offers for ethylene-based PVC from the leading Taiwanese PVC producer surfaced at $730/ton on LC at sight, CIF India main port basis after the volume discount. Response from traders towards this offer is supposed to be good since it will help them to sell cargoes booked at higher costs a few months ago. We opined that traders would buy more volume this time. While for converters, we doubted that they would buy in a big volume since there is no significant improvement in demand for their end products.”
Another Indian trader commented regarding the compensation for March shipment orders, “Offers for March shipment were at $895/ton on LC at sight, CIF India main port basis. The producer is going to give a compensation of $175/ton for the whole volume we purchased for the March shipment. However, the producer limits the price compensation to a maximum of $20/ton for this month.”
A global trading house contacted by SSESSMENTS.COM informed, “The latest offers from the leading Taiwanese PVC producer were surprisingly received positive response especially from the India market. We have sold all of the allocations to the India market within a minute. The orders received even surpass the quantity we have for June shipment.”
“We are trying to book the leading Taiwanese PVC producer’s cargoes at $730/ton on LC at sight, CIF India main port basis for ten containers. But the supplier has yet to reconfirm the availability. It could be a sign of no allocation or already sold out all of the materials,” an Indian trader said.
Meanwhile, a Chinese acetylene-based PVC producer commented, “We are quite surprised that the leading Taiwanese PVC producer increased the offers for June shipment by $40/ton as compared to May shipment. Even though the international PVC market is on the uptrend, we think customers would be unhappy with the amount of the increment.”
Meanwhile, another Chinese acetylene-based PVC producer stated, “Considering the short supply of local ethylene-based PVC, it is possible for the Taiwanese PVC producer to sell all of the allocations to the China market.”
“On a parity basis, the offers from the leading Taiwanese PVC producer is almost at the same level as the local prices. As such, we think traders will not actively take the cargoes as it gives a thin profit margin,” said a Chinese ethylene-based PVC producer.
A Thai ethylene-based PVC producer contacted by SSESSMENTS.COM’s team opined, “We think that the increase of ethylene prices is the major ground of the upward price adjustment made by the leading Taiwanese PVC producer. In our opinion, Thai buyers will accept the price increases since Thai Baht has strengthened towards the U.S Dollar lately.”
“We did not expect that the leading Taiwanese PVC producer will adjust up the offers for June shipment considering the extended lockdown in India. Still, the producer proceeded with an increase of $40/ton from May shipment, hence, we might buy less than usual since it did not match our buy idea,” stated a Vietnamese pipe manufacturer.
“We are pessimistic that buyers will show a good response towards the price increases made by the leading Taiwanese PVC producer. Before the announcement, market players were expecting increases of between $20-30/ton. Upward price adjustment of $40/ton is too much. Considering the slow demand in the Thailand market, we think buyers will show a stiff resistance towards the offers for June shipment,” a Thai converter told SSESSMENTS.COM.
A Vietnamese PVC producer commented, “Upward price adjustment from the leading Taiwanese PVC producer for June shipment is higher than expected. Even though the PVC market in Vietnam is improving, we do not think buyers will show a good response toward the offers.”
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