PVC market prices across Asia are expected to rise as of June offers on reduced market supply from Taiwan, Japan and India, market sources at the Asia Petrochemical Industry Conference in Pattaya said Thursday.
Market participants said June offers could increase $20-30/mt early next week amid the peak season for PVC in India. Although demand in China and Southeast Asia has remained soft, participants said there was the possibility of increasing prices on tightening supply across Asia.
The price increments would ease some pressure on producers suffering from poor margins on high production costs from upstream naphtha crackers and expensive feedstock ethylene prices, a South Korean producer Friday.
Following a partial shutdown of Formosa's 800,000 mt/year VCM plant in Mailiao, Taiwan, Formosa is expected to reduce its monthly spot offers by 5,000 mt until the unit recovers.
According to one Japanese PVC producer Thursday, fewer spot offers will be available from Japan on improving domestic demand and higher prices.
Despite lucrative prices from Indian buyers, Japanese makers were unlikely to release many cargoes into India due to high freight costs, the producer said.
In India, Reliance began trial runs earlier this month at its newly expanded 345,000 mt PVC plant at Dahej, expected to return by June, a company source late Thursday.
Indian domestic supply had tightened further, with local makers such as Chemplast, DCW and Finolex reducing run rates on a sudden shortage of VCM after Qatar Vinyl Company had an unplanned shutdown at its VCM plant.
Earlier, state-owned Qatar Vinyl Company had shut its 300,000 mt/year VCM plant at Mesaieed due to technical problems. According to a trade source, mechanical works should be completed by this week, and the plant should be brought back on line by the end of May. A Japanese trader said Indian end-users were now seeking extremely prompt VCM cargoes and had concluded May-loading shipments close to $1,000/mt CFR India.
