SE Asia PVC demand to grow by 4.4% yearly from 2012-2016 – TPC

09 March 2012 11:18  [Source: ICIS news]

BANGKOK (ICIS)--Southeast Asia’s polyvinyl chloride (PVC) demand is forecasted to grow by 4.4% per year on average over the next five years, an official from Thai Plastic and Chemicals (TPC) said on Friday.

“PVC demand in southeast Asia was 2.2m tonnes in 2011. During 2006–2011 period, PVC demand in southeast Asia grew by around 2% on average,” said Sumphan Luveeraphan, general manager at TPC’s commercial group.

Indonesia and Thailand were the two countries taking off fastest economically, with a 5% compound annual growth rate (CAGR), he added, speaking at the 6th International Chlor-Alkali and Vinyls conference in Bangkok, Thailand.

Growing PVC usage to develop infrastructure, greater consumption as a substitute for other materials as well as more intra-region trades among ASEAN members are some of the opportunities for the PVC industry that will drive growth, Luveeraphan said.

“Demand will increase but capacity remains the same so producers’ export volume will decrease”, said Luveeraphan.

PVC capacity in southeast Asia was 2.2m tonnes in 2011, he said.

“However, it depends on VCM supply whether producers can run at 100%”, he added.

Vinyl chloride monomer (VCM) is the feedstock for the production of PVC.

VCM supply in southeast Asia is short, with demand in 2011 at 1.9m tonnes surpassing capacity at 1.8m tonnes, according to Luveeraphan.

Regional VCM will become tighter as demand is expected to grow to 2.2m tonnes while capacity remains stagnant, he said.

Besides a shortage of raw materials, the southeast Asia PVC industry has to overcome oversupply and price competition, said Luveeraphan.

“There is competition from northeast Asia, with abundant excess capacity, and from north America, with cheap shale gas advantage”, he added.

The 6th International Chlor-Alkali and Vinyls Conference runs from 8-9 March.

By: Feliana Widjaja

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