Indonesian Converters: Significant Adjustment For July Delivery Offers Would Be Well-Accepted As Long As Demand For PVC End-Products Improves
- Local PVC producers already close orders for June delivery
- Improvement observed for several end-products demand
- July delivery offers expected to be adjusted following international prices
A number of Indonesian converters stated that significant adjustment for July delivery offers would be well-accepted as long as demand for PVC end-products improves. On the week starting June 22, SSESSMENTS.COM was told that most Indonesian PVC producers already closed orders for June delivery. Some traders and converters received June delivery offers from local producers between $30-40/ton higher than May. Whereas for July delivery, local producers have yet to announce the offers. In the import market, some traders received July shipment offers for ethylene-based PVC cargoes of Thailand origin at $840/ton on LC at sight, CIF Indonesia Main Port basis. So far, the traders have yet to decide whether to take the cargoes or not as they think such a level is too high and unsure whether it will be workable in the Indonesia market.
As reported to SSESSMENTS.COM, demand for PVC resins in the domestic market remains sluggish this week on the back of ample supply on converters’ hands. Some converters cited that their factories are still running at a reduced rate of around 50-60% from the normal rate due to slow sales for several finished products, such as PVC pipe. However, for other PVC end-products, such as compound and hose, the demand has gradually improved this week. Hence, manufacturers related to compounds and hose already running production at 70-80% from normal rate. On the plant news, market talks have it that Sulfindo Adiusaha had experienced an unplanned shutdown at its 95,000 tons/year PVC plant since last week, and the plant is expected to resume by late this week. Other than that, no supply issues reported this week.
Looking ahead, the majority of market players believe that July delivery offers would increase as much as $90/ton from June following the international prices. Meanwhile, some converters opined to SSESSMENTS.COM that such an increase does not matter if the demand for finished products continues to improve.
