Despite Bullish Sentiment, Vietnam PVC Market Has Not Shown Signs Of Rebound
- Most producers have sold out May delivery allocation
- Market sentiment started to turn around
- Demand stayed on a downward trajectory
SSESSMENTS.COM’s pricing database showed that Vietnam PVC market has not shown any signs of rebound despite bullish market sentiment, one month after imposing partial lockdown to counter the coronavirus. In the domestic market, some producers mostly have sold out May delivery allocation or closed offers in the week ended May 8. A producer has finalized deals for ethylene-based PVC cargoes at the same level to the initial offers or at VND200,000/ton ($8.5/ton) lower on the low-end of the price range. For purchasing volume of 60 tons, another producer managed to secure a deal at VND16,900,000/ton ($721/ton) on cash, 30 days credit term and excluding 10% VAT, or VND100,000/ton ($4.2/ton) lower from the initial offer level. From the import market, a US producer adjusted up its offers further this week. As compared to the initial offer, the producer initiated a price increase of $30/ton, available at $630/ton on LC at sight, CIF Vietnam Main Port basis with deals concluded at the initial offer level.
Most businesses in Vietnam are gradually resuming operations from a month-long closure over the coronavirus pandemic, after authorities started allowing businesses in low-risk areas to resume operations from April 25. Over the week, market sentiment has started turning positive since the government is gradually lifting the partial lockdown measures that have been in place from April 1. Despite bullish market sentiment, the market has not shown any recovery signs yet as the majority of converters remain cautious in procuring materials, while most tend to purchase on as needed-basis on the back of market uncertainties amid a challenging global economy over the pandemic crisis. Sources in Vietnam pointed out that most companies achieved only 75-80% of the initial targeted sales. On the production front, most downstream factories are running at a reduced capacity of 60% from the normal output due to slow sales for end-products. At the moment, no supply issues reported to SSESSMENTS.COM.
Considering the uptrend in VCM and crude oil prices, Vietnamese market players foresee that the possibility of import PVC prices in Southeast Asia market to edge up in the days to come to remain high, considering the improvement in buying sentiment in the global PVC market. However, some expressed that a price increase is not a viable option for the Vietnam market as the demand has not been too forthcoming.
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