15 August 2011 10:25 [Source: ICIS news]
SINGAPORE (ICIS)--Spot prices for polyvinyl chloride (PVC) are stable in south Asia as market participants are staying on the sidelines amid the uncertainty in crude futures, market sources said on Monday.
In addition, demand in the region remains poor because of the ongoing monsoon season from July to mid-September and the Muslim fasting month of Ramadan, market participants said.
Buyers are unwilling to take a position at current price levels for fear that prices may crash in the coming weeks, market participants said.
On the other hand, sellers do not wish to compromise margins by cutting prices and are holding out for a clearer market trend to emerge, they added.
Amid the foggy price outlook, trading has come to a standstill in India and Pakistan, they added.
Prices were at $1,120-1,140/tonne (€784-798/tonne) CFR (cost & freight) India and $1,115-1,130/tonne CFR Pakistan on 12 August, according to ICIS data.
Supply in India has been tight for the last one-and-a-half months, sources said, as a result of production issues at some units as well as a plant turnaround.
India’s Finolex Industries has shut one of its two 130,000 tonne/year PVC lines for annual maintenance since June. Its restart is scheduled for mid-September, a company source said.
Market players in India have a bearish view of PVC prices as the current tight supply situation is expected to ease in the coming weeks, sources said.
“Almost 80,000-100,000 tonnes of cargoes are expected to arrive from now to 10 September and that is predicted to ease the tight supply situation,” said an Indian source.
Nonetheless, India is facing huge delays of seven to 10 days at the customs in clearing goods at the port, a trader said, which may extend the period of tight supply.
In Pakistan, market players are only buying on a need-to basis because of shorter working hours during Ramadan, a market source said. This is especially so for the construction sector, which contributes to at least 50% of the PVC markets.
Prices are expected to remain steady until the beginning of September, when new domestic list prices are to be announced by producers.
Market activity is expected to pick up at the end of Ramadan and the monsoon season.
($1 = €0.70)
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