Petrotahlil-PVC players in Asia have started to voice their expectations regarding a major Taiwanese producer’s May pricing in the midst of gradually improving sentiment and surging crude oil futures. Wide expectations hint at rollovers while some players still believe in the possibility of seeing some further price cuts.
Major Asian suppliers have wrapped up their April business with more-than-expected decreases of $50-60/ton on a monthly basis. “After seeing such declines, prices should stabilize in May,” some regional sellers said.
Sentiment firms up in China
In China, firmer PVC futures combined with the recent positive economic data have helped overall sentiment improve.
September PVC futures on the Dalian Commodity Exchange closed CNY170/ton ($25/ton) higher on April 3 amidst the news that China’s factory activity unexpectedly expanded for the first time in four months in March.
On top of these, the government’s tightening environmental inspections as well as the implementation of the VAT reduction have also supported the sentiment and local PVC prices in China witnessed some weekly gains.
“Considering these factors, we believe that the Taiwanese major will keep its May PVC offers stable after the significant April declines,” a trader opined.
Demand cautiously improves in India
Several traders in India reported that demand has cautiously picked up since the beginning of the new fiscal year on April 1.
“Sentiment has slightly improved, yet buyers are still reluctant to make large scale purchases ahead of the general elections which are due to be held between April and May,” an Indian trader opined.
Meanwhile, a major domestic producer applied a fresh decrease of INR1500/ton ($22/ton) on its local PVC offers as of April 1. Following the producer’s price cut, the weekly average of PVC k67 prices on ex-warehouse India basis hit a three-year low as per ChemOrbis Price Index data.
Indian players’ initial price expectations for May call for rollovers or slight decreases when compared to April given the downward pressure from the local market.
Crude oil surge
Crude oil prices on NYMEX breached above the $62/barrel level on April 2 for the first time since early November, hitting a more than five-month high.
A few PVC sellers in China and India commented, “Crude oil futures extended their gains on the back of tightening supplies, which is without doubt supporting our expectations of stabilization.”