A trader based in India revealed to SSESSMENTS.COM regarding price compensation details from the leading Taiwanese PVC producer for India market. As noted, June shipment offers from the leading Taiwanese PVC producer to India market surfaced at $730/ton.
Based on the report by SSESSMENTS.COM beforehand, the producer skipped offering to India market for May shipment after lockdown from March 24 did not improve India market situation during April. The producer released offers for March and April shipment at $895/ton and $850-860/ton respectively. All offers on LC at sight, CIF Main Port Basis.
Regarding compensation for the India market, unshipped March and April shipment orders will be automatically priced at June shipment price, while the producer will give a price compensation to customers for the price difference with the current June offer level at $175/ton-level for the already-shipped orders. However, according to information from the trader, the maximum compensation issued by the producer is $20/ton per month. “Basically, the producer is going to take premium pricing from customers over the next few months and indirectly give back the premium price as compensation. At the same time, the producer is generous enough to include quantities for shipments made from March 1. The producer is also helpful in extending the LC payments falling due during a lockdown of 30 days, and interest-free,” the trader told SSESSMENTS.COM.
Another trader told SSESSMENTS.COM that this compensation measure is a brilliant strategy because it could keep buyers bound for the next few months to continue buying from the producer. Other traders underlined that this form of compensation could have an opposite effect on market players as within the next 2-3 months the monsoon season would hit India which could ease demand, not to mention the pulling factor of Chinese market movement.
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