Suppliers Worried On Buyers’ Acceptance Level If Local Producers Follow International Prices
- Buyers voiced out acceptance level for August delivery offers
- Some converters prefer lower-priced cargoes over quality amidst the current demand condition
- Indonesian market players stated a blurry outlook for local PVC market
Citing the uptrend in PVC prices in the international market for August shipment, sellers in Indonesia are worried about buyers’ acceptance level if local producers decided to follow suit for August delivery. In the import market, offers for ethylene-based PVC from Thailand for August shipment surfaced with increases of $30/ton as compared to offers for July shipment. The deals were concluded at the initial level, at $870/ton on LC 60 days, CIF Indonesia main port basis. In the local market, the deals for local materials captured at $890/ton on 30 days credit term, FD Indonesia basis and excluding 10% VAT. Based on the data collected by SSESSMENTS.COM, buyers voiced out that increases of between $20-30/ton for August delivery are still acceptable.
Demand for PVC resins in Indonesia is ongoing. As the market reopened at the beginning of June, demand for PVC doors is ongoing, while demand for PVC pipe reported stable to increase slightly. However, private and government projects have yet to resume. Nevertheless, some converters remain cautious on the procurement activities as demand for the end-products has yet to fully recover. Given this situation, some converters are showing stiff resistance towards high prices. Lower-priced cargoes are preferable than high-quality cargoes since converters aim to minimize the costs of productions. On the supply front, SSESSMENTS.COM was told that Indonesia’s Asahimas Chemical (ASC) has started to deliver buyers’ orders. Even though a few days late from the initial schedule, it does not lead to serious issues.
Looking ahead, the outlook for the PVC market in Indonesia remains blurry since some converters are still showing a stiff resistance towards high prices amidst slow demand for the end-products. Although some opined that an increase of between $20-30/ton for August delivery is still acceptable, without support from actual demand for the end-products it would not be workable, sources stated to SSESSMENTS.COM.
