- Local producer applied hefty adjustment on July delivery offers
- Vietnam market showed ongoing demand in May until the beginning of June
- Local PVC prices predicted to remain firm supported by strong feedstock prices
On the week commencing April 6, SSESSMENTS.COM was told that a local producer reduced the offers for ethylene-based PVC cargoes by VND200,000/ton ($8.5/ton) on weekly comparison as the spread of Coronavirus has led to significant decreases in resins demand. Sources revealed that there were no offers available in the second week of April as one of the local PVC producers in Vietnam has closed the offers and another producer has sold out the allocation since the previous week. By the following week, local producers have not disclosed the sell idea yet for May delivery. In the final week of April, a local producer started offering May delivery at between $180-200/ton lower from April delivery’s level in US Dollar denomination. Moving to May, sources stated that there were no fresh offers received in the first week of the month from local producers as the companies were still on the Reunification and Labor day holidays. While on the week commencing May 18, there were no offers available as local producers and traders were waiting for price announcements from the leading Taiwanese PVC producer. Meanwhile, market players noted that deals during May were concluded between VND15,800,000-17,000,000/ton ($678-730/ton) on cash/credit term, FD Vietnam basis, and excluding 10% VAT.
In the first week of June, a local producer increased June delivery offers by VND1,000,000/ton ($43/ton) from May delivery’s level and done deals were concluded at between VND16,800,000-17,000,000/ton ($721-730/ton). Moving to the second week, SSESSMENTS.COM was told that local PVC producers in the country have sold out the allocation for June delivery with the deals concluded at VND17,000,000-17,600,000 ($730-755/ton). All offers on cash/credit term, FD Vietnam basis, and excluding 10% VAT. Utilizing the momentum, local traders increased the offers for local PVC cargoes between VND600,000-1,000,000/ton ($26-43/ton) on a weekly comparison. While for July delivery, sources stated that a local producer announced the offers in the fourth week of June with a hefty upward adjustment of VND2,200,000-2,300,000/ton ($94-99/ton) compared to June delivery’s level. However, market players revealed on receiving the producer’s offer at VND2,000,000-2,800,000/ton ($86-120/ton) higher compared to the same period. Likewise, another local producer also increased July delivery offers by VND2,400,000/ton ($103/ton) while buyers’ recorded increment between VND2,000,000-2,100,000/ton ($86-90/ton) from the price level for June delivery. Bids were submitted at VND600,000/ton ($26/ton) lower from the initial offer level and it was rejected by the producer. For the done deals, sources mentioned that it was concluded at the initial offer level for regular quantity. While for procurement in big quantities, done deals could be achieved at VND100,000-200,000/ton ($4-8.5/ton) lower from the initial offer level.
From the import market, the leading Taiwanese PVC producer trimmed May shipment offers by $160/ton compared to April’s level. Contrastingly for June shipment, the offers from the producer increased by $40/ton compared to the previous month’s price level. Following the announcement for June shipment, a local converter revealed that in the final week of May, the company purchased Taiwanese ethylene-based PVC cargoes at $10/ton lower than the initial offer level at $670/ton on LC at sight, CIF Vietnam Main Port basis. While for July shipment, the producer decided to apply a drastic adjustment of $90/ton higher compared to the same period. As for other origins, SSESSMENTS.COM pricing database showed that June shipment offers for US PVC cargoes increased by $30/ton from May shipment’s level and deals were managed to be concluded at the initial offer level on the week commencing May 11. Likewise, July shipment offers for US PVC cargoes also surged by $80/ton from the offer level for June shipment with some done deals concluded at $30/ton lower than the initial offer level in the third week of June. In the same week, sources noted that July shipment offers for Japanese PVC cargoes increased significantly by $100/ton from the previous month. Despite the hefty adjustment, sources reported that the done deals were achieved at the initial offer level.
Market sources reported to SSESSMENTS.COM that the demand in April was generally slow due to the Coronavirus lockdown. Moreover, on April 15, the government announced that the lockdown in some high risks area such as Hanoi, Ho Chi Minh, and Da Nang, and provinces of Lao Cai, Quang Ninh, Bac Ninh, Ninh Binh, Quang Nam, Binh Thuan, Khanh Hoa, Tay Ninh, and Ha Tinh will be extended for another week. However, as the lockdown was lifted on April 30, market sentiment in Vietnam gradually improved as most converters resumed replenishment activity. However, converters remain cautious in making purchases and kept the procurement on a hand to mouth basis citing market uncertainties, global economic crises due to the pandemic as well as the upcoming rainy season. Entering the first and second weeks of June, PVC demand in Vietnam was still ongoing as the rainy season has yet to affect the market. Nevertheless, the demand was reportedly slowing down from the third week of the month until the final week of the month. Sources explained that buyers were showing resistance towards the higher offers owing to slow sales for finished products as it was affected by the rainy season as well as sufficient inventory from buyers’ end. Sources also revealed that some converters planned to reduce the operating rate further nearing July and some others planned to reduce the purchasing volume. Despite the situation, some converters were still willing to make purchases in anticipation of higher prices.
On the supply front, market sources informed SSESSMENTS.COM that in the second week of June materials were available on traders’ end although local producers in the country had no allocation by that time. While in the production sector, sources reported that AGC Chemicals Vietnam has brought on stream its PVC plant on April 22. Previously, the plant located in Ba Ria - Vung Tau Province, Vietnam with a capacity of 150,000 tons/year was shut due to maintenance shutdown and initially expected to resume production on April 21.
Pertaining to the outlook, market sources predict that local ethylene-based PVC prices will most likely remain stable to firm in the next quarter. Despite the slow demand amid the traditional low season, sources expressed an opinion to SSESSMENTS.COM that the strong feedstock prices will lend support to PVC pricing outlook. While for the demand, it is expected to soften in the near term due to the rainy season.
Range of local ethylene-based PVC transactions in April on cash, FD Vietnam basis (excluding 10% VAT in all terms)
| Origin | Transaction Type | Offers (VND/ton) | Equivalent in USD/ton | Delivery Location |
|---|
| Vietnam | Offer Given | 16,000,000*-20,800,000 | 687-893 | Vietnam |
| Vietnam | Buy Idea | 15,500,000 | 665 | Haiphong |
| Vietnam | Bid Given | 16,500,000 | 708 | Ho Chi Minh |
| Vietnam | Offer Received | 16,500,000-17,000,000 | 708-730 | Ho Chi Minh |
| Vietnam | Purchased | 15,800,000 | 678 | Ho Chi Minh |
| Vietnam | Sold | 19,900,000-20,600,000 | 854-884 | Ho Chi Minh |
| Vietnam | Sold | 20,900,000-21,000,000 | 897-901 | Haiphong |
Description: *Offers for May delivery
Range of import ethylene-based PVC transactions in April, CIF Vietnam Main Port basis
| Origin | Transaction Type | Offers (USD/ton) | Payment Term |
|---|
| India | Bid Given | 600 | LC at sight |
| Japan | Buy Idea | 650 | LC at sight |
| Japan | Offer Received | 630 | LC 90 days |
| Japan | Offer Received | 640-740* | LC at sight |
| Japan | Bid Given | 620 | LC at sight |
| Japan | Purchased | 610-640 | LC at sight |
| Taiwan | Offer Given | 630-640 | LC at sight |
| Taiwan | Offer Received | 610-750 | LC at sight |
| Taiwan | Purchased | 750 | LC at sight |
| Thailand | Offer Received | 615 | LC at sight |
| Thailand | Bid Given | 600 | LC at sight |
| Thailand | Purchased | 630 | LC at sight |
| South Korea | Offer Received | 650**-695 | LC at sight |
| South Korea | Purchased | 700 | LC at sight |
| USA | Offer Given | 630-760 | LC at sight |
| USA | Bid Given | 600 | LC at sight |
| USA | Bid Received | 580-700 | LC at sight |
| USA | Offer Received | 620-670** | LC at sight |
| USA | Purchased | 600-630** | LC at sight |
| USA | Sold | 635 | LC at sight |
Description: *Offers for End-April shipment to selected customers **Offers for April shipment ***Offers for May shipment
Range of local ethylene-based PVC transactions in May on cash/credit, FD Vietnam basis (excluding 10% VAT in all terms)
| Origin | Transaction Type | Offers (VND/ton) | Equivalent in USD/ton | Payment Term |
|---|
| Vietnam | Offer Given | 17,200,000 | 738 | Cash In Advance |
| Vietnam | Bid Given | 16,300,000 | 700 | Cash In Advance |
| Vietnam | Buy Idea | 16,000,000-17,000,000 | 687-730 | Cash In Advance |
| Vietnam | Offer Received | 16,000,000-17,600,000 | 687-755 | Cash In Advance |
| Vietnam | Sell Idea | 17,500,000-18,000,000 | 751-772 | Cash In Advance |
| Vietnam | Sell Idea* | 720-770 | - | LC at sight |
| Vietnam | Purchased | 16,500,000-16,600,000 | 708-712 | Cash In Advance |
| Vietnam | Purchased | 16,900,000 | 725 | 30 Days Credit Term |
| Vietnam | Sold | 15,800,000-17,000,000 | 678-730 | Cash In Advance |
Description: *Offers on CIF basis
Range of import ethylene-based PVC transactions in May on LC at sight, CIF Vietnam Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| Japan | Buy Idea | 570-660 |
| Japan | Offer Given | 680-690* |
| Japan | Offer Received | 640-680 |
| Japan | Purchased | 620-680 |
| Japan | Sold | 680-690* |
| Taiwan | Offer Given | 680 |
| Taiwan | Offer Received | 680 |
| Taiwan | Sell Idea | 660 |
| Taiwan | Purchased | 670 |
| Thailand | Offer Given | 680-690 |
| Thailand | Offer Received | 650 |
| Thailand | Sold | 680 |
| USA | Offer Given | 630-660 |
| USA | Offer Received | 630 |
| USA | Purchased | 630 |
Description: *June shipment
Range of local/localized ethylene-based PVC transactions in June on cash/credit, FD/EXW Vietnam basis (excluding 10% VAT in all terms)
| Origin | Transaction Type | Offers (VND/ton) | Equivalent in USD/ton | Payment Term | Delivery Term |
|---|
| Vietnam | Bid Given | 18,600,000-19,360,000 | 798-831 | Cash In Advance | FD |
| Vietnam | Offer Given | 17,500,000-19,200,000 | 751-824 | Cash In Advance | FD |
| Vietnam | Offer Given | 16,800,000-19,600,000 | 721-841 | 15 Days Credit Term | FD |
| Thailand | Offer Received | 18,700,000 | 803 | Cash In Advance | EXW |
| Vietnam | Offer Received | 18,000,000-20,000,000 | 772-858 | Cash In Advance | FD |
| Vietnam | Purchased | 19,550,000-19,900,000 | 839-854 | Cash In Advance | FD |
| Vietnam | Purchased | 17,000,000-17,200,000 | 730-738 | 15 Days Credit Term | FD |
| Vietnam | Sold | 17,500,000-19,800,000 | 751-850 | Cash In Advance | FD |
| Vietnam | Sold | 16,800,000-17,500,000 | 721-751 | 15 Days Credit Term | FD |
Range of import ethylene-based PVC transactions in June on LC at sight, CIF Vietnam Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| Indonesia | Offer Received | 780 |
| Indonesia | Sold | 780 |
| Japan | Bid Given | 760 |
| Japan | Offer Given | 780 |
| Japan | Offer Received | 780 |
| Japan | Purchased | 780 |
| Japan | Purchased | 780 |
| Japan | Sold | 770 |
| Philippines | Offer Given | 760-770 |
| Philippines | Offer Received | 800 |
| Taiwan | Offer Given | 770-780 |
| Taiwan | Offer Received | 740-780 |
| Taiwan | Purchased | 770 |
| Thailand | Bid Given | 770 |
| Thailand | Offer Received | 790 |
| USA | Offer Given | 785-800 |
| USA | Offer Received | 750-780 |
| USA | Purchased | 760* |
| USA | Purchased | 750 |
| USA | Sold | 750 |
Description: *Done deals on LC 180 days
Tags: Asia Pacific,English,PVC,Quarterly,SEA,Vietnam
Published on July 7, 2020 8:39 AM (GMT+8)
Last Updated on September 24, 2020 5:02 PM (GMT+8)
