20 February 2013 07:23 [Source: ICIS news]
SINGAPORE (ICIS)--Taiwan’s Formosa Plastics Corp (FPC) has hiked its offers of March-loading polyvinyl chloride (PVC) cargoes by $50-70/tonne (€37.50-52.50/tonne) from the February offers, said company sources on Wednesday.
The hike in offers was on the back of high feedstock vinyl chloride monomer (VCM) costs and limited supply in Asia, the company sources added.
“Feedstock [VCM] prices are too high now, and caustic soda prices are very soft. We took these factors into account,” said one of the sources.
The Taiwan-based major producer offered March-loading parcels at $1,090/tonne CIF (cost, insurance & freight) China, $70/tonne higher than its February price.
Meanwhile, offers to India for March-loading cargoes were also raised by $50/tonne to $1,100/tonne CIF India, while offers to other export markets such as southeast Asia were at $1,090/tonne CIF SE Asia.
However, the total cargo volume available for export is 60,000-70,000 tonnes, 25,000-30,000 tonnes higher than what was offered for February sales, added the sources.
As seen in the previous month, the breakdown of cargo volumes for each specific region has not been determined as FPC would have to observe the market demand and supply situation further.
According to the company sources, there will be discounts offered for bulk purchases of over 1,000 tonnes.
Most Asia-based producers said they would subsequently begin to offer March-loading PVC cargoes to the market following Formosa’s announcement of their prices, although opinions over the prices were mixed.
A producer based in northeast Asia said that it “seriously doubted if buyers can accept this price level” as the price hike is very significant.
This view was not shared by another northeast Asia-based maker, who said that it would probably offer PVC at the end of the week. The maker said that FPC’s price hike is significant, but it is reasonable as “supply is very tight, and there are no PVC cargoes coming to Asia from the US in March because of supply issues”.
Earlier, US-based PVC maker Westlake has declared force majeure on their PVC following upstream VCM supply issues, weighing further on the supply of deep-sea cargoes coming into Asia from the US for March.
($1 = €0.75)
Additional reporting by Veena Pathare and Becky Peng
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