Local ethylene-based PVC offers on cash/credit term, FD Indonesia basis, excluding 10% VAT
Description: *USD/IDR exchange rate= 14,000Mixed Performance On Indonesia’s PVC Demand, ‘’New Normal’’ Brings Ray Of Hope
- Leading Indonesian PVC producer announced July delivery offers with hefty adjustment
- Indonesia’s Asahima Chemical to resume production at VCM plant by early July
- Majority of Indonesian market players expressed a positive outlook
Market sources informed SSESSMENTS.COM that the demand movement in the Indonesia PVC market is scrambled. Compared to June shipment, July delivery offers from the leading Indonesia PVC producer surfaced with an upward adjustment of $90/ton. For the quotation in the local currency, sources revealed that some suppliers are still using the same currency exchanged rate as last month at IDR14,000/USD although the latest currency exchange rate is already between IDR14,200-14,300/USD. Meanwhile, another local producer voiced out a sell idea for July delivery also at $90/ton higher from last month. From the import market, there are no fresh offers recorded at the time of publication. For import acetylene-based PVC cargoes of China origin, sources stated that the offers are unworkable as of recent, therefore they are not bothered to check the latest levels. However, some traders are offering their old stock at lower prices in order to compete with local prices, and some deals were concluded at around $800/ton-level. While some others revealed that the allocation from Chinese suppliers is limited, hence, there is no allocation to the Indonesia market.
According to market sources’ report to SSESSMENTS.COM, PVC demand in Indonesia is showing mixed performance. Some sources stated that the demand is gradually improving as customers are showing better sentiment supported by improved market activity following the implementation of “new normal” from the government. While some others stated that there is no significant improvement recorded. As such, the procurement activities are kept on a hand to mouth basis. Some buyers revealed that the company decided to skip the procurement activity owing to the sufficient inventory on hand. On the supply side, the leading PVC producer in the country reported that local supply is limited due to the ongoing maintenance at another local producer’s plant. While on the production sector, Indonesia’s Asahimas Chemical reported to resume the company's VCM plant no.2 by early July. The plant with a capacity of 350,000 tons/year has been shut previously for about one month for turnaround maintenance.
Looking ahead, the majority of Indonesian market players expressed an opinion to SSESSMENTS.COM that the demand will gradually improve in the near term as players are gaining more confidence supported by the “new normal” implemented by the government. As such, there is room for August shipment offers to increase between $10-20/ton, further supported by the increases in the upstream market. The current VCM price reached $650/ton supported by the firm crude oil as well as ethylene prices. Compared to a month ago, VCM price on CIF Asia was below $600/ton threshold. Moreover, there is a possibility of reduced allocation from the leading Taiwanese producer due to the upcoming turnaround maintenance at their plant.
Tags: Asia Pacific,English,Indonesia,PVC,SEA,Weekly
Published on June 30, 2020 11:38 AM (GMT+8)Last Updated on June 30, 2020 11:38 AM (GMT+8)
