PVC sellers rely on the hope of better demand in China and Vietnam

Vietnam has begun to cautiously since the COVID-19 blockade, as China did, after apparently flattening the coronavirus curve. With import PVC prices in Asia standing at their lowest levels in more than a decade amid India's absence, global PVC sellers are now focusing on these two markets hoping to see better demand.

Demand has been higher in China with the easing of restrictions

China, the early epicenter, was the first country to escape the coronavirus crisis. Local demand has improved since the country loosened domestic travel restrictions to facilitate the movement of workers, and many downstream factories have resumed operations.

Accordingly, overseas PVC suppliers have shifted their focus to China to divert their surplus goods.

Demand for imported goods has recently been better as domestic raw materials are more expensive, a trader in China reported.

Vietnam is expected to replicate the recovery in China

Market businesses are looking to Vietnam to recreate a rebound in China, which has seen a rebound after they lifted restrictions. Vietnam lifted restrictions related to COVID-19 weeks ago after reporting no new cases.

The removal of the blockade has brought hope of increased demand and increased production rates as people return to work and go out more. Optimism also suggests that PVC prices may have seen a floor in the short term, according to market players.

Demand for our end products is starting to get better as the wet season approaches and the demand for raincoats will increase. We have started to add more reserves because the current levels are profitable, said a Vietnamese converter.

The rainy season in Vietnam usually lasts from April to September, with June, July and August being the wettest months.

The low domestic price prompts the bargain

Domestic PVC prices in Vietnam are currently down 11% from March at USD923 / ton on an FD basis, the lowest level since the first quarter of 2016, according to data from ChemOrbis price index.

At the current level it is very cheap and we still buy it although the market is still not so good. But we don't think PVC prices will plummet over the next few months, said a local trader.

There are still discount elements to see. Is early optimism?

Despite improving demand in China and Vietnam, weak sentiment in the rest of Southeast Asia and India could undermine import prices and create more competition and pressure. with local prices.

Overall demand remains weak with blockades widening or tightening in countries like India, Indonesia, Malaysia, Singapore and the Philippines, sellers noted in the region.

Realizing the weak demand, a major Taiwanese producer reduced their prices for Asia by USD160 / ton last week.

Following the major Taiwanese producer, an Indonesian producer reduced the K67-68 PVC cuts in May to Southeast Asia by USD190 / ton while a Thai PVC producer cut their May asking prices. they are in USD165 / ton.

Asian markets have also been pressured by low-priced deep sea goods from the US, which have been hit hard by a lack of demand from major Indian importers.