- Local and import PVC offers in Indonesia established in distinct trend during Q2 2020
- The overall demand was sluggish during Q2 2020 on the back of several reasons
- There are chances for a further increase in prices following the firmer VCM prices
Throughout Q2 2020, SSESSMENTS.COM’s data showed that the price trend for local offers in Indonesia's PVC market were moving in distinct directions. For April delivery, the offers for ethylene-based PVC from several Indonesian producers surfaced with a decline of $50/ton. In late April, in order to move out cargoes more smoothly, one of the local producers decided to adjust down their offers again by $20/ton on the low-end range as compared to offers at the beginning of April. Meanwhile, May delivery offers from several producers in the country have emerged with a notable reduction of $160/ton compared to April. At that time, some converters decided to secure some deals, whereas some others decided to skip May shipment as they have ceased production until early June due to Coronavirus pandemic. At the end of the Q2 2020, some traders and converters received June delivery offers from local producers between $30-40/ton higher than May.
Similar to local, SSESSMENTS.COM noted that import PVC offers in the Indonesia market also experienced diverse changes during Q2 2020. For April shipment, the offers from the leading Taiwanese PVC producer decreased by $50/ton. In the following month, the leading Taiwanese PVC producer initiated another downward adjustment for May shipment by $160/ton. In contrast, June shipment offers from the leading Taiwanese PVC producer have emerged in the Southeast Asia market, including Indonesia, at $40/ton higher. Some players assumed that the increase for June shipment was in-line with the firmer ethylene prices during that time. For July shipment, the leading Taiwanese PVC producer implemented a notable increment of $90/ton. All offers were on month-on-month comparison.
As reported to SSESSMENTS.COM, during April, the sales for both PVC resins and end-products was shrinking significantly owing to the big-scale social restrictions. Due to this, some converters were forced to run production at a reduced rate and some others already shut their factories. Even, a local producer had to cut production rate at its PVC plant by 20%. In the following month, no improvement was seen in demand. In fact, the overall sales from both producers and converters’ end dropped between 15-30% as compared to April sales. At that time, some buyers were on an as-needed basis procurements and some others remained on the sidelines on the back of slow demand for finished products. Additionally, even though Indonesia government has moved the four-day Eid collective leave from May 26-29 to December 28-31, most converters have decided to shut production from May 21 until the beginning of June, citing that lack of orders to be fulfilled during the period. In June, a slight improvement was seen after the Indonesian market fully resumed from Eid Al-Fitr holiday. Yet, buying sentiment was generally slow during that month as the impact of Coronavirus pandemic was still lingering.
On the plant news, Indonesia’s Standard Toyo Polymer 82,000tons/year PVC plant was shut twice during Q2 2020. First, on May 23, the producer’s plant was shut due to Eid Al-Fitr holiday, second, on May 27, the PVC plant was shut for maintenance purposes. However, on June 16, the PVC plant reportedly was running production normally. On the supply side, no significant issues reported to SSESSMENTS.COM during Q2 2020.
Looking forward into Q3 2020, the majority of Indonesian market players contacted by SSESSMENTS.COM believe that the domestic PVC market will gradually improve following the “new normal” implementation by Indonesian government as a form of relaxed measures for business sectors in several big cities in Indonesia starting from the second week of June. In terms of prices, increment in the local and import market will most likely be seen onward considering the firmer VCM prices as supported by the high crude oil and ethylene prices.
Transactions for local ethylene-based PVC in April, FD Indonesia basis and excluding 10% VAT in all terms
| Origin | Product | Currency | Offers/ton | Equivalent in USD/ton | Payment Term |
|---|
| Indonesia | Offer Given | IDR | 13,000,000-13,500,000 | 893-928 | Cash In Advance |
| Indonesia | Offer Given | USD | 880*-960* | - | Cash In Advance |
| Indonesia | Offer Given*** | USD | 650-680 | - | Cash In Advance |
| Indonesia | Offer Received | IDR | 11,900,000-14,000,000** | 818-962 | Cash In Advance |
| Indonesia | Offer Received | IDR | 12,900,000-14,134,000 | 886-971 | 30 Days Credit term |
| Indonesia | Offer Received | IDR | 16,400,000 | 1,127 | 90 Days Credit term |
| Indonesia | Offer Received | USD | 700 | - | Cash In Advance |
| Indonesia | Offer Received | USD | 870-920 | - | 30 Days Credit term |
| Indonesia | Purchased | IDR | 13,050,000 | 897 | Cash In Advance |
| Indonesia | Purchased | USD | 870-920* | - | 30 Days Credit term |
Description: *USD/IDR exchange rate at 15,000 **USD/IDR exchange rate at 16,000 ***Offers for big quantity purchase
Transaction for import acetylene-based PVC in April on LC at sight, CIF Indonesia Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| China | Offer Received | 770 |
Transactions for local ethylene-based PVC in May, FD Indonesia basis and excluding 10% VAT in all terms
| Origin | Product | Currency | Offers/ton | Equivalent in USD/ton | Payment Term |
|---|
| Indonesia | Offer Received | IDR | 10,000,000-10,100,000 | 678-694 | 45 Days Credit Term |
| Indonesia | Offer Given | USD | 730-760 | - | 30 Days Credit Term |
| Indonesia | Offer Received | USD | 700 | - | Cash In Advance |
| Indonesia | Offer Received | USD | 740-770 | - | 30 Days Credit Term |
| Indonesia | Offer Received | USD | 690 | - | 45 Days Credit Term |
| Indonesia | Purchased | USD | 700 | - | Cash In Advance |
| Indonesia | Purchased | USD | 740-770 | - | 30 Days Credit Term |
Transaction for import PVC in May on LC at sight, CIF Indonesia Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Offer Received | 680 |
| Thailand | Ethylene-based | Offer Received | 840 |
Transactions for local/localized ethylene-based PVC in June, FD Indonesia basis and excluding 10% VAT in all terms
| Origin | Transaction Type | Offers (USD/ton) | Payment Term |
|---|
| China | Sold | 920 | Cash In Advance |
| Indonesia | Sell Idea | 860-870 | Cash In Advance |
| Indonesia | Buy Idea* | 870-890 | 30 Days Credit Term |
| Indonesia | Buy Idea* | 820-830 | Cash In Advance |
| Indonesia | Offer Given | 700-790 | Cash In Advance |
| Indonesia | Offer Received | 690-810 | Cash In Advance |
| Indonesia | Offer Received | 780**-850 | 30 Days Credit Term |
| Indonesia | Offer Received | 770-840 | 45 Days Credit Term |
| Indonesia | Purchased | 730-810 | Cash In Advance |
| Indonesia | Purchased | 780-800 | 30 Days Credit Term |
| Indonesia | Purchased | 840 | 45 Days Credit Term |
Description: *July delivery **USD/IDR exchange rate at 14,100
Transaction for import ethylene-based PVC in June, CIF Indonesia Main Port basis
| Origin | Transaction Type | Offers (USD/ton) | Payment Term |
|---|
| Taiwan | Offer Received | 790-800 | LC at sight |
| Thailand | Offer Received | 840 | LC 60 Days |
| Thailand | Purchased | 840 | LC 60 Days |
Tags: Asia Pacific,English,Indonesia,PVC,Quarterly,SEA
Published on July 6, 2020 6:30 PM (GMT+8)
Last Updated on September 10, 2020 9:29 AM (GMT+8)
