Published On: Fri, May 18th, 2012

June PVC prices expected to fall in Southeast Asia despite healthy demand

June PVC prices expected to fall in Southeast Asia despite healthy demand

June PVC prices expected to fall in Southeast Asia despite healthy demand

Players in Southeast Asia’s PVC market are bracing for decreases in the month of June in spite of the fact that demand remains steady in the region, as per the pricing service of ChemOrbis. Sources commented that falling upstream costs, weakening regional trends and the upcoming start of the rainy season are putting downward pressure on prices for the coming month, with some sellers reporting that they have already agreed to some reductions on their prices.

A PVC compounder in Indonesia stated, “We purchased 100 tons of domestic material this week as demand for our end products is healthy and we were able to secure a $20/ton discount from our suppliers.” An Indonesian producer who had conceded to some reductions on their prices earlier this month in order to preserve their market share against the threat of cheaper imports stated that they concluded their May business to the local market at their new price levels this week. “We were able to conclude our May deals this week as demand from the construction sector remains strong,” a producer source reported.

Prices were stable to softer in the Indian market this week, with distributors and converters reporting that that they are trying to delay their purchases for now as they expect to see lower prices for June, says ChemOrbis. “We have decided not to make any fresh purchases this week in spite of the fact that we do not have any material in stock,” an Indian distributor reported. “We feel that we will be able to purchase at more attractive levels if we delay our purchases until next week,” the distributor added. Another India based trader added, “We are in no mood to purchase for now as we think that lower prices will be available over the near term. Demand has slowed down a bit from last month and we expect to see further weakening in demand next month owing to the impending start of the monsoon season.”

A Vietnamese producer told ChemOrbis that they left their offer levels unchanged this week while complaining of unsatisfactory sales. “We are struggling to conclude deals at the moment as many buyers are sticking to the sidelines in anticipation of seeing lower prices in the days ahead,” a producer source reported. A converter manufacturing PVC pipes commented, “We purchased 200 tons of material this week as we are still seeing healthy demand for our end products. However, the impending start of the rainy season next month will exert some downward pressure on prices and we expect to see a stable to softer trend over the next few weeks.”

Players in Thailand also reported that trading activity was limited in spite of steady demand in the market as many players expect to see lower prices in the days ahead. A converter manufacturing plastic pipes reported, “We purchased some material to cover our needs this week but are hesitant about purchasing in large amounts for now. We think that domestic prices may move lower this month and plan to monitor regional price trends for a while longer before making any additional purchases.”