A source with knowledge of the matter informed SSESSMENTS.COM that the leading Taiwanese PVC producer has finalized pricing strategy for August shipment, citing several supporting factors from China and India market. According to the source, the leading Taiwanese PVC producer is likely to maintain the offers for August shipment stable or even surface with increases.
In the China local market, there are several conditions that could act as supporting factors to keep the offers firm. Recently, local PVC prices in the China market are on the uptrend following the hike in the futures market as a result of the capital injection. Added to that, acetylene-based PVC prices are expected to remain firm on the back of the higher transportation cost. Starting from July 1, the Chinese government has implemented stringent regulation of hazardous chemical transportation, including carbide, after the LNG tanker explosion occurred in East China in the middle of June. Besides, demand from the construction sector is expected to be robust in the near term, “We might see PVC prices in the China market to be much higher compared to the other regions due to the new regulation on hazardous chemical transportation. While in terms of demand, at the moment demand for PVC in the local market is still ongoing although some areas affected by the flood. It would not be a serious problem as the rainy season should be over soon. After the flood, demand will be robust for the reconstruction,” as stated by the producer to SSESSMENTS.COM.
From the export market, SSESSMENTS.COM noted that the producer is confident that Indian buyers will keep procuring some materials although the monsoon has started to kick-in in the country. Based on the feedback from the producer’s contacts in India, these are some insights that will support PVC prices to be on an uptrend. The producer explained that “In general, inventory level at Indian customers is on the low side at the moment. As such, they would be willing to buy despite the monsoon season. Since the total import volume in the India market in June was much lower than we expected; thus we opined that the availability of materials in the market is quite low. Added to that, the two major local PVC producers in India were exporting a big volume earlier and they are still exporting. Hence, we predict that some of the local PVC inventory has already been digested.”
