November PVC offers meeting with acceptance in China

In China, regional producers announced their long-awaited November import offers last week with smaller than expected decreases of around $10-30/ton when compared with the October done deal level of $870-890/ton CFR China.  As import prices to the Southeast Asian market had fallen as low as $800/ton on CIF basis and offers for Northeast Asian imports in the Turkish and Egyptian markets had suggested FOB Asia prices of less than $800/ton, many observers had been expecting November offers to China to be announced with larger decreases in line with developments in other global markets. 

However, sellers decided to opt for limited decreases, claiming that they could not afford to give larger price cuts due to rising upstream costs while also commenting that they managed to divert much of their normal allocation to alternate markets such as India where demand proved more satisfactory.  Market participants in India reported that demand in that country showed significant improvements following the recent Diwali holidays, with demand for imports receiving a further boost due to some production problems within the country.

This week, a major Taiwanese producer reported that they sold around half of their November allocation at $850-860/ton CFR China, steady to $10/ton lower on the low end when compared with their initial November offers and $20-30/ton lower than the October done deal level.  The producer said that their export allocation for China is smaller than usual this month at around 20,000 tons and that they anticipate being able to conclude their November business at similar prices over the next week. 

Meanwhile, a trader offering Japanese cargoes at $860-880/ton CFR China commented that their November business is performing normally and that they are confident that their current offer levels will eventually meet with acceptance from the buyers' side, although they have not been able to conclude any major deals so far.

In Southeast Asia, news of higher than expected November offers to China helped push up the market level last week, with one Thai producer raising their prices by a total of $20-40/ton over the past week and another Thai producer reporting that they managed to sell out their November allocation at higher prices this week as demand picked up following the announcement of new offers to the Chinese market. 

A converter in Vietnam reported that they received an offer for Japanese material late last week at $870/ton CIF Vietnam, a noticeable increase over the most recent offers they had received at $780-810/ton with the same terms.  The buyer said that they are adopting a wait-and-see attitude to the market in hopes that this new upward trend proves to be of limited duration.  Locally, expectations of lower prices for November have given way to news of rollovers or slight increases as sellers attempt to lift their prices in response to better than expected news from China.  A Malaysian producer reported that they rolled over their November offer levels from October after initially considering a price cut of MYR100/ton ($29/ton) while converters in Thailand are speculating about a possible increase of THB1000/ton ($30/ton) for November after they had initially been predicting either rollovers or slight decreases on producers' initial November offer levels.