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Will Taiwanese major roll over November PVC offers?

by Beyza Solakoglu - bsolakoglu@chemorbis.com
by Cansu Koca - ckoca@chemorbis.com
  • 23/10/2019 (11:33)
India and SEA PVC markets are cautious ahead of major Taiwanese producer’s November offers, which are expected to be revealed soon.

According to several players, November PVC offers for India, Southeast Asia and China markets by a major Taiwanese producer are likely to be rolled over.

The monthly offers by the Taiwanese supplier is expected to be announced this week or next.

The market in China, meanwhile, was quiet due to the week-long national holiday starting from October 1.

Players reported that the producer’s PVC K67-68 offers for October stood at $910/ton CIF India, cash and at $870/ton CIF China, cash. A $10/ton discount was obtainable for purchases at/above 500 tons.

Indian producer issues price protection

With the Taiwanese producer’s November offers yet to be announced, a local producer in India has implemented price protection on PVC until the next price adjustment. This will reimburse the price difference if prices are revised downwards until the deadline for protection.

The price protection is likely to allay customers’ fears over the uncertainty regarding the Taiwanese producer’s offers, which might set the market direction.

Another local producer rolled over PVC prices last week amid robust domestic demand while waiting for the Taiwanese producer’s November offers.

Although trading activity might be partly reduced due to a holiday in India this week, demand tends to get stronger during this period as businesses look to make up for the slowdown during the monsoon period stretching from June to September.

Around 70% of the total demand for PVC in India is consumed by the pipes sector, where the material is widely used in underground irrigation and water distribution pipes. The remaining 30% of demand comes from the construction sector, where PVC is used to make films, profiles, insulation and in calendaring applications.

Japanese suppliers maintain offers in quiet market

Two Japanese suppliers have also kept offers unchanged from the previous offers for October shipment.

A source of a Japanese supplier said that no notional changes have been seen during the week while the market was quiet due to the Chinese holidays and caution ahead of the Taiwanese producer’s November offers.

Chinese players will return on October 8 after the end of their lengthy holidays, but it may take a bit of time to settle back into the usual market activity. This means that a clear market direction may only be noticeable by next week.

Turnarounds limit supply, demand improves after monsoon

Others, in the meantime, do not exclude the possibility of a price increase from the Taiwanese major for November given the fact that demand is improving in India following the end of the monsoon season. The rainy season in Vietnam is also coming to an end, spurring better demand.

There are also some turnarounds taking place in the region, limiting PVC supplies, several players concurred. This may also lend support to price increases, they argue, unless economic concerns do not weigh on the market.

On a side note, the import PVC markets also witnessed an upturn for November last year in line with the end of the monsoon season after a steady downturn from mid-July.
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