The Asian PVC market ended the week of September 19 in a steady position, succeed by higher domestic prices in China along with stable export demand from India. Southeast Asia was stable overall and trading activity was limited with the buyers waiting for October offers. Overall, with steady output in China and firm exports, the outlook remains cautiously positive, and prices should remain supported into early October.
In the week ending September 19, the Asian polyvinyl chloride (PVC) market showed signs of stability, with price momentum being driven by increases in China's domestic market and sustained export demand into India, even as pressure from weak downstream activity remained for some regions.
Further, exporters began to add support for overall market sentiment. FOB China assessments for carbide-based PVC rose, whereas FOB ethylene-based prices were stable. Traders cited firm demand from India as lower freight rates from China were making imports attractive. “At present, low sea freight rates from China to India are providing good support for demand,” a producer from China noted.
Domestic PVC markets in China have reported stronger tradable levels as of the week of Sept. 17, showing gains for both East China's ethylene-based prices and for carbide-based PVC. Given that sentiment remained weak and prices were steady for much of that week, the increase in prices marked a cautious sense of optimism in a still-quiet import market, with CFR China prices stagnant during this week.
Southeast Asia reported stability but remained cautious overall. Prices for CFR Southeast Asia PVC were unchanged on the week, but most buyers did not see the need to rush into any selling or purchasing positions until they would see fresh offers for product for October. Most trades over that week were considered muted and market participants portrayed a wait-and-see position on sales in the market overall.
In India, prices slipped on the week, as lower-priced Chinese product entered the market. Domestic manufactured PVC prices also slipped in India. Traders indicated that buyers in the market were waiting on potential updates regarding anti-dumping duties which were initiated at the beginning of August and were to begin implementation thereafter.
Although India is experiencing weakness, regional fundamentals remain strong. For example, South Korea's PVC exports for August saw a year-on-year uptick, although the volumes fell on a month-over-month basis. Additionally, China's production levels have remained steady while domestic benchmarks have increased, suggesting underlying consumption remains solid.
Overall, the Asian PVC market in Mid-September looked mulled but offers positive support collaterally. The domestic strength of prices in China and cash flows from the export markets offset the weaker demand coming out of India, thereby creating a cautious, but positive outlook for the region.
The PVC market is expected to remain steady to firm through the end of September as traders await October offers for clarity. While import demand for China has slowed, gains in domestic demand and export support from India are providing sentiments for the region.
According to ChemAnalyst, prices for PVC will remain supported through Asia, given the strength of domestic prices in China and export support from India. October offers will be key in the price direction, as sellers will go higher to test levels with feedstock costs increasing and shipping economics being supported. Price increases could be limited if demand coming out of India does not improve and price coming out of China were available under market price. Either way, the overall outlook is stable to firm as we approach early October.
