PVC markets fail to extend gains to Oct on economic woes, low demand in Asia.
Petrotahlil :In India, China and Southeast Asia, a major Taiwanese producer adopted different pricing policies for October after delaying its announcement by a few days as crude oil futures sharply fluctuated early this week owing to the weekend attacks on Saudi oil facilities.
On Wednesday, the producer rolled over its new PVC prices to India while cutting its offers by $20/ton to China and Southeast Asia.
Renewed stagnation in Asia PVC market after Sept hikes
Upon the new offers from the Taiwanese major, a stable to soft trend has re-emerged in the PVC market for October.
Having applied increases for June and July, the producer adjusted its offers down for August. Although tight supply led to some increases in September offers, the producer appears to have yielded to the pressure from economic woes and limited demand across the region again this month by conceding to rollovers to small price cuts.
Rollover decision meets expectations in India
India’s PVC market was largely stable following the major producer’s rollover decision, which was in line with players’ expectations formed by improving demand and limited supplies.
“PVC demand has been picking up on the back of the approaching end of the monsoon season and low supply levels, yet the depreciation of the rupee against the US dollar continues to weigh on import activity and prevent price levels from moving upwards,” a seller based in India said.
$20 decrease comes as a surprise in China, SEA
Prior to the announcement, sellers operating in China and Southeast Asia had already been admitting that buying sentiment was persistently stagnant. Still, their expectations for October had mostly centered on rollovers owing to China’s firming Dalian futures as well as limited supply availability.
“We were slightly surprised to see that October PVC prices were cut by $20/ton to China. The country’s local PVC market is slightly higher for another week in line with the recent gains in futures prices,” a few players noted.
PVC futures on the Dalian Commodity Exchange posted a cumulative increase of CNY185/ton ($26/ton) in the first two days of this week before cancelling almost 22% of their total gain on Wednesday.
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