Price Movements Recorded From Both Local And Import PVC Cargoes, Southeast Asia Market Responds Accordingly
- A shift in local offers captured in the Philippines, while competitive import offers seen in Malaysia
- Each country sees a different performance in demand
- Pricing outlook depends on feedstock prices and supply condition
There is a reception from the Southeast Asia market as price movement was recorded in both local and import PVC cargoes. A producer based in the Philippines revealed to SSESSMENTS.COM that offers for August delivery were adjusted up by PHP2,000/ton ($40/ton) compared to July delivery. The offers stand between PHP53,000-54,000/ton ($1,072-1,093/ton) on cash, FD basis and including 12% VAT. While market players in Thailand are still waiting for August delivery offers, which are expected to come out by next week. From the import market, the leading Indonesian PVC producer offered PVC cargoes for August shipment at $810-820/ton on LC at sight, CIF Southeast Asia Main Port basis, up by $30-40/ton compared to July shipment. The market response is positive according to a regional trader as the offers are competitive. As a comparison, initial offers from Thai PVC producers stand between $820-905/ton this week, while buy ideas from Malaysian manufacturers for Thailand cargoes are at $840-850/ton. Meanwhile, import PVC offers from South Korea and China in the Malaysia market are available at $840-850/ton and $890/ton, respectively. Detailed information for Indonesia and Vietnam market is available in WeeklySSESSMENTS of the respective countries.
While normal activities return in Malaysia, demand for PVC resin remains in a weak state. Manufacturers keep production rate between 50-90% as end-product orders slowly return with construction work only just begun around the country. Low inventory absorption as supported by production rate having an impact on converters’ purchasing volume for PVC resins. SSESSMENTS.COM was told that manufacturers opted to buy on a need basis with the import market circumvent the effect by only accepting shorter credit terms. A different picture emerges from the Philippines and Thailand. Demand is considered good amid traditional low season in these countries with packaging demand becoming the main benefactor in the Philippines market. However, concerns loom that supply chain restrictions could occur at any time if market conditions worsen.
Looking ahead, some players expect the PVC price trend would be affected by the recent ethylene price drop. However, SSESSMENTS.COM noted that there is a constraining factor as PVC supply in Southeast Asia is still limited and would cushion prices from falling.
