Local PVC Producers In Vietnam To Adjust July Delivery Offers In Contrast With Demand Movement
- July delivery offers predicted to come out with hefty adjustments
- PVC demand in Vietnam started to slow down
- Rainy season casts a dark shadow on demand and pricing outlook entering July
SSESSMENTS.COM was informed that local PVC producers in Vietnam will adjust July delivery offers in contrast with the demand movement in the country. As of June 16, July delivery offers from the local PVC producers have yet to come out. However, the local producers have voiced out plans to apply hefty adjustments to follow the international price trend as well as the rapid increases in production cost. A local producer expressed the sell idea for July delivery at above VND19,000,000/ton-level although it is necessary to monitor the market movement further, while another producer plans to increase July delivery offers by $90-100/ton. For localized Thai ethylene-based PVC cargoes, the offers are available at VND18,700,000/ton on cash, EXW Ho Chi Minh basis, and excluding 10% VAT and deemed unworkable by buyers. From the import market, deals for import PVC cargoes of US origin were concluded at $750/ton, some sources reported that the deals were $30/ton lower from the initial offer level. While for Japanese origin, the offers are captured higher by $100/ton from last month with deals closed at the initial offer level at $780/ton. All import offers on LC at sight, CIF Vietnam Main Port basis.
PVC demand in Vietnam has been showing signs of waning due to the rainy season and slow sales for finished products. Moreover, most buyers already have sufficient inventory on hand and some are sufficient up to four months of production needs. Meanwhile, the production rates from most converters are running at around 60-80% from the normal output. Hence, buyers are not in a rush to make procurements. On the supply side, there are no issues in the country reported to SSESSMENTS.COM.
Looking ahead, market sources expressed an opinion to SSESSMENTS.COM that if July delivery offers for PVC increase around VND1,400,000-1,500,000/ton ($60-64/ton) to VND19,000,000/ton-level, the offers should be acceptable to buyers as import offers are estimated to be equivalent to around VND18,300,000/ton, excluding 10% VAT. While coming into July, sources opined that the chance for local PVC prices to increase is thin as the demand is predicted to shrink significantly due to high intensity of rainfall by that time.
