Indonesia PVC Market Gained Momentum, Coronavirus Fears Keep Gains In Check
- Leading Taiwanese PVC producer announced July shipment offers
- Demand showed a slight improvement, but below market expectations
- Standard Toyo Polymer delayed the restart of PVC plant
SSESSMENTS.COM’s data showed that Indonesian PVC market has gained momentum, but rising cases of the novel coronavirus kept a lid on gains. In the domestic market, local producers maintained their high price quotes for June delivery. Following the leading Taiwanese PVC producer’s pricing strategy, most producers initiated a price increase of $40/ton for local offers in USD denomination as compared to May delivery offers with most transactions concluded at the initial offer level. For small quantities of purchases, some converters managed to secure a deal at $840/ton on 45 days credit terms, FD Indonesia basis and excluding 10% VAT. From the import market, July shipment offers from the leading Taiwanese PVC producer surfaced at $100/ton higher from June shipment, captured at $790/ton on LC at sight, CIF Southeast Asia Main Port basis with a discount of $10/ton is applicable for 500 tons and above to all markets.
Indonesian PVC market saw a slight improvement in terms of demand from the prior week as the market has fully resumed from Eid Al-Fitr holidays. However, the majority of Indonesian market players view the current situation as below the expectations since the lockdown restrictions takes a firm hold over the nation, grounding the economy to a standstill. In fact, most regions are still fighting their respective battles against the highly contagious disease with different levels of intensity. Jakarta, Indonesian capital city, has extended its large-scale social restrictions (PSBB) on June 4, and declared June as transition period to a “New Normal '' with more relaxed measures for business sectors. Echoing the same view, Surabaya, Indonesia's second largest city, and its surrounding areas have begun to lift restrictions starting from June 8 despite a spike in the number of confirmed cases in East Java provinces. This week, most downstream factories are still running at a reduced capacity of 50-60% from the normal output, while some factories were forced to halt the production due to slow demand for end-products. On plant news, Indonesia’s Standard Toyo Polymer has pushed back the restart of its PVC plant to another week as the company is facing a massive manpower shortage. Previously, the plant with a capacity of 82,000 tons/year was shut for maintenance purposes on May 27. Meanwhile, no significant supply issues reported to SSESSMENTS.COM.
For the outlook, the majority of Indonesian market players voiced out to SSESSMENTS.COM that domestic demand will gradually move higher on the back of firmer energy market. Under the normal market situation, sources in Indonesia pointed out that most buyers will tend to purchase more volumes in line with the uptrend in the market, albeit the overall market condition is not in good shape. While some sources are concerned that the government mulls extending the lockdown period beyond June considering a steady rise in Coronavirus infections.
