Rainy Season Affected PVC End-Products Demand In Vietnam, Certain Manufacturer Enjoyed Satisfactory Sales
- Offers for local and import PVC cargoes captured on the same trend
- Rainy season affected PVC end-products demand
- Outlook is rather varied and uncertain
On the week commencing May 25, import and local offers in Vietnam PVC market were reported firm. A converter informed SSESSMENTS.COM on purchasing import ethylene-based PVC of Japan origin at the initial level of $680/ton and purchased Taiwan ethylene-based PVC cargoes at $670/ton, $10/ton lower than the initial offers. A local trader stated that their offers for ethylene-based PVC from Japan and Thailand stood at $680-690/ton, increased between $30-40/ton from last two weeks' offers. All import offers are on LC at sight, CIF Ho Chi Minh Port. In the domestic market, a converter purchased local ethylene-based PVC cargoes at the initial level at VND16,600,000/ton ($710/ton). Meanwhile, direct offers from a local PVC producer stood at VND17,600,000/ton ($753/ton) for small converters, while for big converters, offers could be lower. Market sources opined that such high levels for local ethylene-based PVC are unreasonable and deals should be lower around VND16,500,000/ton ($706/ton), thus some buyers placed bids as low as VND16,300,000/ton ($697/ton). From the trader's side, selling ideas for local ethylene-based PVC are between VND17,500,000-18,000,000/ton($749-770/ton), considering the uptrend in both VCM and crude oil prices. All local offers are on cash, FD Vietnam basis and excluding 10% VAT.
Demand-wise, overall PVC demand is weak due to the rainy season. However, a raincoat manufacturer stated that their company's end-product demand is healthy, as the rainy season is the high season for their product demand. Meanwhile, another converter mentioned that their sales remain slow, as such, their production only runs at 50%. On the trader side, as buyers already stocked up more than usual volume to benefitted from lower prices last week, their imported Thailand ethylene-based PVC cargoes have already sold out. Consequently, the deals concluded this week decreased amid ongoing price uptrend. No supply issues were reported to SSESSMENTS.COM.
For the outlook, as the rainy season usually would last until October, the demand for PVC-based rain apparel is predicted to remain good, but for other end-product manufacturers opined their business is predicted slow for upcoming months, SSESSMENTS.COM noted. Overall, as the movements of VCM and crude oil prices are still unpredictable, most players find it hard to predict the direction of PVC prices. Moreover, if there is still no support from end-products demand, the buying sentiment is expected to be weaker in weeks ahead.
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