WeeklySSESSMENTS: Indonesia PVC Prices Week Starting July 27

Author: SSESSMENTS

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Indonesian Market Players: Tepid Demand Growth, Oversupply Concern Limit PVC Price Gains

Local producers have yet to announce August delivery offers
Tepid demand growth, oversupply fears will limit price gains
Market grappled with supply overhang

Tepid demand growth and oversupply concern would limit price gains in Indonesia PVC market, sources voiced out to SSESSMENTS.COM. During the week, fresh local and import offers were scarce as most suppliers prefer to hold back until they have better clarity on market conditions before finalizing their offers. In the domestic market, market sources mentioned that local producers in Indonesia plan to announce their August delivery offers next week. The majority of producers hinted to adjust up the offers for August delivery between $10-30/ton as compared to the level available for July delivery. Sources highlighted that price gains are likely limited as oversupply concern prevails. Besides, not all industry sectors in Indonesia are moving in a positive direction. From the import market, a Chinese producer has announced fresh offers for August shipment to Indonesia market this week. A few buyers reported on receiving August shipment offers for acetylene-based PVC cargoes from the producer at $885/ton on LC at sight, CIF Indonesia Main Port basis. However, buyers were reluctant to procure the cargoes as the producer’s offers were deemed too high and uncompetitive compared to local offers.

Indonesia PVC market has been under strain in recent weeks, with sentiment persistently pessimistic amid falling demand from the end-user segment. Some sources revealed that recovery in end-products demand has yet to take hold, particularly from automotive and construction sectors as consumer confidence yet to bounce back in the wake of the country's uncertain economic situation. However, some converters are still seeing a strong surge in demand for medical supplies, including for PPE (Personal Protective Equipment) and Face shield. Some sources mentioned that production at most manufacturers in Indonesia is running between 50-100% depending on their market shares. On the supply front, some converters are still saddled with high inventory due to a drop-off in demand in their domestic and export markets, SSESSMENTS.COM was told.

For the outlook, market sources in Indonesia voiced out to SSESSMENTS.COM that there would be no room for PVC prices to move lower in the days to come, backed by rising monomer prices. Some sources expressed that government spending on goods and services will help to support domestic demand.

Local ethylene-based PVC offers, FD Indonesia basis (all excluding 10% VAT)