Healthier Demand Observed In Indonesia PVC Market, Will It Sustain?
Healthier demand observed in Indonesia PVC market this week, however, some players are questioning its sustainability. On the week starting July 13, several converters reported receiving July delivery offers from Indonesian PVC producers at $90/ton higher than last month’s level, following the leading Taiwanese PVC producer’s pricing strategy. As SSESSMENTS.COM noted, most offers are currently available between $860-870/ton on cash, FD Indonesia basis and excluding 10% VAT. To date, a converter managed to secure some volumes at the initial offer levels with an exchange rate at IDR14,100-per US Dollar, while another deal was concluded at the low-end level of the price range with a volume of purchase of 1,000 tons. In the import market, no fresh offers were recorded in the Indonesia market as most players are waiting for the August shipment offers from the leading Taiwanese PVC producer.
In general, demand for PVC resins in Indonesia’s domestic market has indeed improved in-line with end-product sales, yet there are some sellers lamenting that sales for PVC resins from their side remain slow. Speaking of end-products, some converters stated that demand for products such as pipe, roofing and gardening hose is healthier as supported by the shift of the rainy to dry season as well as the upcoming projects coming from the private and government sectors. Following suit, production rates from downstream manufacturers also recorded an increase from 50% to 70% on the monthly comparison. On the supply front, some converters reported that Indonesia’s Asahimas Chemical (ASC) is unable to deliver 140 tons PVC cargoes that have been purchased by the converter beforehand due to supply shortage, citing that the producer was facing some problems with production last month. A trader also assumed that the producer is having a limited supply at their end since the company could not fulfil the trader’s request for additional volumes. Yet, the overall supply in the domestic market is quite ample this week, as told by some Indonesian players to SSESSMENTS.COM.
Looking ahead, the majority of Indonesian market players contacted by SSESSMENTS.COM are unsure of the market outlook. Players said that the market movement is rather hard to predict as of recent; hence, most of them prefer to adopt a wait-and-see approach. Prices are no longer predictable since most suppliers will use whatever stimulus exists in the market to keep the high prices, even when the state of demand is not too promising. Demand-wise, converters hope that more government projects in the days to come will support end-products sales.
Local ethylene-based PVC offers on FD Indonesia basis, excluding 10% VAT
Tags: Asia Pacific,English,Indonesia,PVC,SEA,Weekly
Published on July 14, 2020 11:36 AM (GMT+8)
