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The Asia PVC Markets Are At A Six-Month-High, And New March Spikes Are Anticipated From Taiwan

Prices of imported PVC across primary markets in Asia have risen to six-month highs as they bounced back from two-and-a-half-year bottoms in November. Participants mainly anticipate a Taiwanese giant to increase prices further to Asian buyers for the third consecutive month, even though concisely this time.

The majority of the players hope that the prices of Taiwanese major's PVC K67-68 will arrive at USD 960-970/ton CIF India, at USD 870-880/ton FOB Taiwan and about USD 920/ton CIF China. The current month's offers were at USD 930/ton CIF India, USD 840/ton FOB Taiwan and USD 885/ton CIF China.

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As per a Mumbai-based trader, they comprehend the Taiwanese major itself hinted to the agents and buyers that costs might rise a little for March, and they anticipate that it most probably not be in the USD 70-100/ton increments that were witnessed for January and February.

Parties Foresee A USD 30-40/Ton Rise in Taiwanese Major Proposals

One more trader based in Mumbai stated that he expects prices to rise by around USD 30-40/ton. They have noticed a slight gain in the levels of prices during January, and this would undoubtedly be reflected in the major’s March prices.

Simultaneously, there were some others who were expecting a rollover from February. Due to the occurrence of the Chinese New Year and the Indian Republic Day holidays, January was a quiet month. According to an Indian trader, they assess that the prices might be steady for March, even though they did see a slight rise in the last month.

An Increase Of 23-32 Percent in Prices of Imports Since Mid-November

According to the source, the CIF prices have advanced since mid-November by 23% in Southeast Asia, 25% in China, and 32% in India.

Altogether, the Chinese FOB prices have advanced by around 18% during the same time. The import ethylene-based PVC K67 shipments prices were evaluated at USD 880-930/ton CIF Southeast Asia, USD 940-980/ton CIF India, and USD 960-940/ton CIF China for the week ending on February 4.

Buzz about a VCM shortage in Japan

A player in India reported the offers from a producer in the US made through a trader at USD 980/ton CIF India. For March, a Taiwanese major’s shipment deal was also reported to be at the same level. Meanwhile, the Chinese offers were noted at USD 940-960/ton CIF India. Shipments from South Korea and Japan were not proposed in the week, with a trader indicating that an evident vinyl chloride monomer shortage in China has affected Japanese PVC production.

Chinese players also anticipated the Taiwanese giant to increase the prices for the march by a little. As per a China-based trader, they anticipate the costs to rise slightly, presumably up to USD 40/ton, as the Taiwanese player might be looking forwards to aiding the current market.

However, others stated that it might be too soon to predict. Another Chinese trader said that they believe it would keep on monitoring the market in the present week prior to putting out the offers next week.

Chinese and Taiwanese suppliers present higher to SEA

In Southeast Asia, the suppliers from China approached the market with offers that were more elevated after the Lunar New Year holidays. The Chinese offers were up by about USD 30/ton for acetylene-based K67 as well as USD 40/ton for ethylene-based K67 in contrast to pre-holiday levels. The Taiwanese spot offers are also increased amidst restricted supply and hopes of further spikes in the Taiwanese major’s March announcement, as per a Philippines buyer.

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According to the Procurement Resource article, the PVC market sentiments are returning favourably due to strong regional demand and the lifting of COVID restrictions in China. The prices of PVC are starting to move in an upward direction following the continuous nine-month decline in prices, channel inventory has dried up, and the off-take volume is returning to normal levels.

It is anticipated that FY23 demand for Suspension PVC in India will hit the pre-pandemic levels of 3.3 million tonnes, which is a 16-17 percent growth compared to FY22. All in all, with the price recovery for PVC along with healthy demand trends, it is expected that the Q4 FY23 performance will make a comeback in terms of the growth trajectory.