Frail demand pulls PVC lower for another month in Asia
Demand has been quite slow across the region for almost three months. Import PVC prices have been steadily moving lower across the region since mid-April, according to ChemOrbis Price Index. This was in line with the slowdown in demand from the Indian PVC market, which is the largest import market of the region and therefore is considered to be the price-setter. The fact that the monsoon season has already kicked off in India and it is expected to last until September is also playing a role in the persistently weak outlook for the PVC market.
The Taiwanese major’s declines were modest due to its less-than-normal export allocations, commented players. The producer is reportedly having turnarounds at one of its cracker currently while it is also planning to shut some VCM and EDC units in July. The relative strength of spot ethylene prices must also be pushing the producer to limit the decrease amount in its PVC offers, argued a few players.
Following the move of the Taiwanese major, a Japanese producer also reported lowering its PVC offers by the same amounts to China, Southeast Asia and India. The source from the producer commented, “We are still looking for alternative export destinations as demand in Asia remains lackluster. We are open to negotiations with buyers placing serious bids.”
Asian PVC offers have been sporadically showing up in Turkey since mid April, which coincides with the start of the softening trend in China and India. Plunging freight rates have helped these regional origins to gain a competitive edge for more than a month. Regarding freights, an average rate of $10-15/ton can be obtained from shipping lines from Asia to Turkey since late May and and will be valid until the end of June.
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