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QuarterlySSESSMENTS: Q2 2020 Indonesia PVC Prices

Author: SSESSMENTS

  • Local and import PVC offers in Indonesia established in distinct trend during Q2 2020
  • The overall demand was sluggish during Q2 2020 on the back of several reasons
  • There are chances for a further increase in prices following the firmer VCM prices

Throughout Q2 2020, SSESSMENTS.COM’s data showed that the price trend for local offers in Indonesia's PVC market were moving in distinct directions. For April delivery, the offers for ethylene-based PVC from several Indonesian producers surfaced with a decline of $50/ton. In late April, in order to move out cargoes more smoothly, one of the local producers decided to adjust down their offers again by $20/ton on the low-end range as compared to offers at the beginning of April. Meanwhile, May delivery offers from several producers in the country have emerged with a notable reduction of $160/ton compared to April. At that time, some converters decided to secure some deals, whereas some others decided to skip May shipment as they have ceased production until early June due to Coronavirus pandemic. At the end of the Q2 2020, some traders and converters received June delivery offers from local producers between $30-40/ton higher than May. 

Similar to local, SSESSMENTS.COM noted that import PVC offers in the Indonesia market also experienced diverse changes during Q2 2020. For April shipment, the offers from the leading Taiwanese PVC producer decreased by $50/ton. In the following month, the leading Taiwanese PVC producer initiated another downward adjustment for May shipment by $160/ton. In contrast, June shipment offers from the leading Taiwanese PVC producer have emerged in the Southeast Asia market, including Indonesia, at $40/ton higher. Some players assumed that the increase for June shipment was in-line with the firmer ethylene prices during that time. For July shipment, the leading Taiwanese PVC producer implemented a notable increment of $90/ton. All offers were on month-on-month comparison.

As reported to SSESSMENTS.COM, during April, the sales for both PVC resins and end-products was shrinking significantly owing to the big-scale social restrictions. Due to this, some converters were forced to run production at a reduced rate and some others already shut their factories. Even, a local producer had to cut production rate at its PVC plant by 20%. In the following month, no improvement was seen in demand. In fact, the overall sales from both producers and converters’ end dropped between 15-30% as compared to April sales. At that time, some buyers were on an as-needed basis procurements and some others remained on the sidelines on the back of slow demand for finished products. Additionally, even though Indonesia government has moved the four-day Eid collective leave from May 26-29 to December 28-31, most converters have decided to shut production from May 21 until the beginning of June, citing that lack of orders to be fulfilled during the period. In June, a slight improvement was seen after the Indonesian market fully resumed from Eid Al-Fitr holiday. Yet, buying sentiment was generally slow during that month as the impact of Coronavirus pandemic was still lingering.

On the plant news, Indonesia’s Standard Toyo Polymer 82,000tons/year PVC plant was shut twice during Q2 2020. First, on May 23, the producer’s plant was shut due to Eid Al-Fitr holiday, second, on May 27, the PVC plant was shut for maintenance purposes. However, on June 16, the PVC plant reportedly was running production normally. On the supply side, no significant issues reported to SSESSMENTS.COM during Q2 2020. 

Looking forward into Q3 2020, the majority of Indonesian market players contacted by SSESSMENTS.COM believe that the domestic PVC market will gradually improve following the “new normal” implementation by Indonesian government as a form of relaxed measures for business sectors in several big cities in Indonesia starting from the second week of June. In terms of prices, increment in the local and import market will most likely be seen onward considering the firmer VCM prices as supported by the high crude oil and ethylene prices.

Transactions for local ethylene-based PVC in April, FD Indonesia basis and excluding 10% VAT in all terms

OriginProductCurrencyOffers/tonEquivalent in USD/tonPayment Term
IndonesiaOffer GivenIDR13,000,000-13,500,000893-928Cash In Advance
IndonesiaOffer GivenUSD880*-960*-Cash In Advance
IndonesiaOffer Given***USD650-680-Cash In Advance
IndonesiaOffer ReceivedIDR11,900,000-14,000,000**818-962Cash In Advance
IndonesiaOffer ReceivedIDR12,900,000-14,134,000886-97130 Days Credit term
IndonesiaOffer ReceivedIDR16,400,0001,12790 Days Credit term
IndonesiaOffer ReceivedUSD700-Cash In Advance
IndonesiaOffer ReceivedUSD870-920-30 Days Credit term
IndonesiaPurchasedIDR13,050,000897Cash In Advance
IndonesiaPurchasedUSD870-920*-30 Days Credit term
Description: *USD/IDR exchange rate at 15,000 **USD/IDR exchange rate at 16,000 ***Offers for big quantity purchase

Transaction for import acetylene-based PVC in April on LC at sight, CIF Indonesia Main Port basis

OriginTransaction TypeOffers (USD/ton)
ChinaOffer Received770

Transactions for local ethylene-based PVC in May, FD Indonesia basis and excluding 10% VAT in all terms

OriginProductCurrencyOffers/tonEquivalent in USD/tonPayment Term
IndonesiaOffer ReceivedIDR10,000,000-10,100,000678-69445 Days Credit Term
IndonesiaOffer GivenUSD730-760-30 Days Credit Term
IndonesiaOffer ReceivedUSD700-Cash In Advance
IndonesiaOffer ReceivedUSD740-770-30 Days Credit Term
IndonesiaOffer ReceivedUSD690-45 Days Credit Term
IndonesiaPurchasedUSD700-Cash In Advance
IndonesiaPurchasedUSD740-770-30 Days Credit Term

Transaction for import PVC in May on LC at sight, CIF Indonesia Main Port basis

OriginProductTransaction TypeOffers (USD/ton)
ChinaAcetylene-basedOffer Received680
ThailandEthylene-basedOffer Received840

Transactions for local/localized ethylene-based PVC in June, FD Indonesia basis and excluding 10% VAT in all terms

OriginTransaction TypeOffers (USD/ton)Payment Term
ChinaSold920Cash In Advance
IndonesiaSell Idea860-870Cash In Advance
IndonesiaBuy Idea*870-89030 Days Credit Term
IndonesiaBuy Idea*820-830Cash In Advance
IndonesiaOffer Given700-790Cash In Advance
IndonesiaOffer Received690-810Cash In Advance
IndonesiaOffer Received780**-85030 Days Credit Term
IndonesiaOffer Received770-84045 Days Credit Term
IndonesiaPurchased730-810Cash In Advance
IndonesiaPurchased780-80030 Days Credit Term
IndonesiaPurchased84045 Days Credit Term
Description: *July delivery **USD/IDR exchange rate at 14,100

Transaction for import ethylene-based PVC in June, CIF Indonesia Main Port basis

OriginTransaction TypeOffers (USD/ton)Payment Term
TaiwanOffer Received790-800LC at sight
ThailandOffer Received840LC 60 Days
ThailandPurchased840LC 60 Days

Tags: Asia Pacific,English,Indonesia,PVC,Quarterly,SEA

Published on July 6, 2020 6:30 PM (GMT+8)
Last Updated on September 10, 2020 9:29 AM (GMT+8)