- Contrast trend between local and import offers observed in September
- Demand was better compared to the same period in 2018, supported by construction sector
- There are chances for a further decrease in prices
At the beginning of Q3 2019, Vietnam’s PVC market began on a stable trend in the local offers, while import offers showed a downward trend. In July, local offers for ethylene-based PVC in the country were mostly stable, except in the week commencing July 8. In this particular week, a local producer had to adjust down offers by VND300,000/ton ($12.9/ton) lower than a week earlier due to appreciation in Vietnamese Dong against the U.S Dollar amid the slow demand for PVC resins. Despite the adjustment, localized Thai cargoes still deemed more attractive than local materials, SSESSMENTS.COM noted. In the import market, August shipment offers from the leading Taiwanese PVC producer surfaced with a decrease of $30/ton, while Japanese cargoes decreased by $20/ton. Likewise, offers for Indonesian cargoes dipped between $20-40/ton. All import offers were on a monthly comparison.
In August, offers for August delivery from the local producers moved down between VND100,000-700,000/ton ($4.3-30/ton) from July’s level. From the import market, offers for Taiwanese PVC cargoes for September shipment to the country emerged with an increase of $20-30/ton compared to August. Similarly, September shipment offers from Indonesian and Thai producers moved higher by $30/ton also compared to August shipment.
Moving to September, local and localized offers were stable to firmer while import offers showed stable to softer trend. On the week commencing September 2, September delivery offers from a local producer emerged with an increase of VND500,000-700,000/ton ($21.4-30/ton) compared to August. In the following week, offers from another local producer increased by VND500,000/ton ($21.4/ton) compared August delivery. Meanwhile, offers for localized cargoes were mostly stable during the month. For import cargoes, US PVC origin recorded a decrease of $20/ton in the third week as compared to a fortnight earlier. Likewise, offers for Taiwanese PVC cargoes from suppliers were down by $5/ton while Thai cargoes down by $10/ton, all on a weekly basis.
Overall, demand for PVC resins in Vietnam during Q3 2019 was sluggish as traditionally, July to September is the low season for PVC in the country due to the rainy season. The traditional belief among Chinese communities about Ghost Month (August 1-August 29) also affected buying sentiment in the country. Besides, monsoon in the Southern part and extremely hot weather in the Northern part of Vietnam had led to lower operating rates at downstream factories. However, market sources reported to SSESSMENTS.COM that on a year-on-year basis, PVC demand was better compared to the same period in 2018, especially for the construction sector. The increase in infrastructure projects as many Chinese inventors chose to set up business in Vietnam following US-China trade friction was cited as the major reason behind the better demand.
On the production sector, TPC Vina Plastic And Chemical Corp Ltd. reported conducted maintenance shutdown at its PVC plant no.1 with a capacity of 80,000 tons/year on September 24. The plant was back brought on-stream on October 5, earlier than the initial schedule of October 10. On the supply front, no significant issues reported during the third quarter despite the maintenance shutdown as demand remained weak.
Pertaining to the outlook, the majority of market players told SSESSMENTS.COM that there are chances for further decreases in PVC prices as no sign of improvement in demand seen nearing the year-end ahead of the preparation for the Chinese New Year in January 2020.
Tags: Asia Pacific,English,EN PVC VIETNAM QSS,Polyvinyl Chloride (PVC),QuarterlySSESSMENTS,Southeast Asia,Vietnam PVC prices,Vietnam PVC pricesPublished on October 25, 2019 4:27 AM (GMT+8)
Last Updated on January 14, 2020 7:43 AM (GMT+8)