Local ethylene-based PVC offers on cash, FD Ho Chi Minh basis (including 10% VAT in VND term, equivalent in USD excluding VAT)
Import ethylene-based PVC offers on LC at sight, CIF Vietnam Main Port basis
Vietnam PVC Market Grappling With Surplus Of Supply Amid Seasonal Slowdown
- The availability of local offers remain scarce
- Traders, converters grappled with a supply glut amid the traditional low season
- Downstream factories cut operating rates to match current demand
SSESSMENTS.COM data showed that Vietnam PVC market is grappling with a surplus of raw materials as seasonal slowdown takes hold. This week, spot offers from domestic and import offers remain scarce. In the domestic market, most traders prefer to hold back until they have better clarity on market conditions before finalizing their offers. Meanwhile, a local producer has sold out July delivery allocations and has yet to announce fresh offers for August delivery. One of the local traders in Vietnam maintained a stable offer level for local ethylene-based PVC cargoes from a week earlier, available at VN21,600,000/ton ($930/ton) on cash, FD Ho Chi Minh basis and including 10% VAT. However, the number of transactions remains limited as local converters are not actively seeking fresh materials, with most still holding onto sufficient stocks amid slow sales. From the import market, the leading Taiwanese producer has announced August shipment offers to Southeast Asia market this week. In comparison to July shipment offers, current offers are $20-30/ton higher.
Vietnam PVC market continues to face severe headwinds, with the country still in the grip of a withering cold spell amid the rainy season. Traditionally, the market is heading into a seasonal lull as the onset of the rainy season in June puts a damper on sales for end-products. This week, most converters in Vietnam prefer to refrain from purchasing materials on the back of sour demand, holding onto sufficient stocks bought at lower costs. As seasonal slowdown hits the market, most downstream factories are lowering their operating rate to offset current demand. Some manufacturers in the country are still running at a reduced capacity, around 70% from the normal output. On the supply front, SSESSMENTS.COM was informed that most traders and converters in Vietnam are saddled with high inventory levels. As reported, one of the local traders has more than 1,000 tons of raw materials this week.
A weak performing market led to a pessimistic view among Vietnamese market players. For the near-term outlook, sources contacted by SSESSMENTS.COM commented that if both local and import prices continue to increase, buyers will pose a stronger resistance due to the sluggish demand amid the seasonal slowdown.
Tags: Asia Pacific,English,PVC,SEA,Vietnam,Weekly
Published on July 14, 2020 1:03 PM (GMT+8)Last Updated on July 14, 2020 1:03 PM (GMT+8)
