• by Shibu Itty Kuttickal – sikuttickal@chemorbis.com
• by Merve Sezgün – msezgun@chemorbis.com

Players expect a major Taiwanese producer to offer September PVC cargoes to Asian markets with an increase of at least $60/ton from its August levels. The major’s offers are likely to be notified to buyers either on August 10 or 11. Spot prices, meanwhile, have already headed north on the back of bullish sentiment, particularly in India.

“A $60/ton hike is perhaps the minimum the Taiwanese will go for,” said a Mumbai-based trader. “We should perhaps see over $100-120/ton hikes if the latest offers and deals by South Korean, Taiwanese, Japanese, and the Middle Eastern producers to India are any indication,” he added.

In comparison, the major producer’s August K67-68 offers to China and India were moderately down by $30-60/ton on the month to $1210/ton CIF China and $1330/ton CIF India.

Bullish expectations for Sep trigger hikes in spot offers

Asian suppliers have already approached the regional markets with higher offers this week as hike expectations for the Taiwanese major’s September pricing have fueled a bullish sentiment.

Suppliers raised prices and did not come up with as much resistance as in the previous weeks.

According to traders, a Japanese producer applied an increase of almost $100/ton on its September PVC offers to India this week. Some deals were reportedly concluded at around $1530/ton CIF.

Spot offers for Korean K67 were also higher than the previous week to be reported at around mid- $1400/ton CIF India. Meanwhile, some South Korean and Taiwanese producers withdrew their August prices from the Indian and Chinese markets, believing that prices will increase further next week.

Resurgent demand to keep sentiment firm

Players commented that PVC prices surged this week since Indian buyers were out to get more cargoes. There was pent-up demand discernible, as some buyers had stayed away from the market for long. Buyers were also stocking up for the post-monsoon seasonal demand.

Market participants voiced expectations of a further increase in Indian PVC demand ahead of the post-monsoon season starting mid-September.

“Some pent-up demand showed up as converters had kept away from buying for too long, fearing prolonged bearishness,” a trader said. “Indian demand post the monsoon period is anticipated to pick up strongly for PVC pipe applications in agriculture and construction,” a Singapore-based trader added.

Demand in Southeast Asia was also better than in previous weeks as traders and converters started replenishing stocks. “There is concern among buyers that prices could go further up and hence we are seeing stronger buying activity in the region,” a trader said. He added that end-user buying still needed to pick up and there was no visibility of that happening due to the spreading of the Delta variant in the region.

Meanwhile, players noted that Chinese domestic demand is likely to be consistent even when supply returns to normal as plants complete their maintenance.

Rising freights also push prices higher

The ongoing shortage of containers in the Northeast Asian region has led to further increases in freight costs recently. Rising freight rates are likely to be factored into the import PVC prices in the near term, players opined.