Taiwan’s FPC hikes January PVC offers to Asia by $50/tonne

13 December 2012 06:55  [Source: ICIS news]

SINGAPORE (ICIS)--Taiwan’s Formosa Plastics Corp (FPC) has raised its January offers for polyvinyl chloride (PVC) to China, India and other markets by $50/tonne (€38/tonne) from December’s prices, because of firmer feedstock costs, a company source said on Thursday.

The Taiwanese producer has offered January-loading lots to India at $1,000/tonne CFR (cost & freight) India and L/C 90 days, with a quantity discount of $10/tonne for volumes over 1,000 tonnes. It is also offering a $10/tonne discount for L/C at sight bookings.

FPC’s export offers to China are at $980/tonne CFR China Main Port (CMP) and offers to southeast Asia are at $1,000/tonne CFR southeast Asia.

Other producers in Asia are expected to follow suit and announce similar price hikes during the week.

According to market sources, the export volumes from FPC for January shipment will be lower than usual, on account of an outage at its upstream vinyl chloride monomer (VCM) facility in end-November.

While the outage was resolved by early December, the producer’s PVC production volumes were affected, leading to lower quantities of product available for export.

Export volumes to India will be reduced by 10-12%, while volumes to China took a significant hit, the source said, without disclosing information on the volumes offered.

According to other market sources, the total export volume available from FPC in January will be 50,000 tonnes, a drop from the 65,000-70,000 tonnes offered for December shipment.

Approximately 20,000 tonnes/month are typically shipped to China, but in January, shipments will be reduced by 10% or more, sources said. 

Aside from the outage at FPC's VCM plant and its reduced PVC supply for export, other market factors are supporting the firmer PVC prices, suppliers said.

The supply and demand ratio in Asia is expected to tighten further, given the impending decommissioning of Malaysian producer PETRONAS’ 150,000 tonne/year PVC facility in Kerteh on 1 January 2013.

Malaysia is expected to become a net importer of PVC instead of exporting the product from next year onwards, market sources said.

Exports from the US to Asia have also dwindled because of rising domestic demand for reconstruction projects within the country following the aftermath of Hurricane Sandy. The hurricane devastated large portions of the mid-Atlantic and northeast regions of the US in late October.

Some US suppliers were also heard to be diverting their export volumes to destinations offering better netbacks than China. The markets include Latin America, the Gulf Cooperation Council (GCC), Turkey and Egypt.

Offers from US producers to the GCC markets were heard at $1,015/tonne CFR GCC for January shipments, while offers to Turkey were heard at $910-920/tonne FAS Houston.

($1 = €0.76)

Additional reporting by Gabriela Wheeler and Becky Peng

By: Veena Pathare
+65 6780 4327

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