Asian PVC Markets Firm as Buyers Brace for Potential October Hike

Asian PVC prices continued their upward trend in the week ending September 18, with China, Southeast Asia and India all recording gains. Elevated crude oil and ethylene costs have kept producer replacement costs high, strengthening sellers' efforts to maintain firmer pricing.

Market attention is now focused on the October pricing announcement from a major Taiwanese producer. Expectations for another increase have strengthened after the producer raised its September offers twice within a little over two weeks.

Market participants are currently discussing a potential $30-50/ton increase for October, although the producer had not confirmed its new prices at the time of writing.

Regional PVC prices approach four-month highs

PVC markets across Asia have moved higher since mid-July, although the pace of gains has varied between countries.

China's export PVC K67 prices have maintained a stable-to-firmer trend and are now close to four-month highs. Southeast Asian import prices have increased by a cumulative 24% since mid-July, while India's import prices have also risen 24% over the same period, reaching a four-month high.

The regional increase has largely been driven by higher production and replacement costs rather than a broad improvement in downstream demand.

Buyers in several markets continue to purchase mainly for immediate requirements and remain reluctant to accept the highest seller offers.

Two September increases strengthen October expectations

The Taiwanese producer's recent pricing actions have become an important factor behind expectations of another increase.

The producer initially raised September offers on August 25 before announcing another round of increases on September 10. Together, the two adjustments resulted in cumulative September increases of $20-70/ton, depending on the destination.

No volume discounts were announced during either pricing round.

The second increase came as crude prices moved above $100/bbl and regional ethylene costs climbed sharply. With feedstock and energy costs remaining elevated, market participants in China, Southeast Asia and India are increasingly expecting another increase for October.

Expectations are particularly firm in India, where higher import replacement costs and reduced availability of competitively priced Asian cargoes have provided additional support to sellers. However, buyer resistance remains a key uncertainty, especially for expensive import material.

Higher costs continue to support sellers

Ethylene and freight costs are adding to the upward pressure on PVC replacement costs.

Northeast Asian spot ethylene prices extended their recent gains this week following significant increases over the previous two weeks, while Southeast Asian prices were largely stable. High crude and naphtha costs, reduced cracker operating rates and limited spot availability continue to keep production economics under pressure.

Freight has also become more expensive for shipments into India. Taiwan-to-India freight rose to around $120/ton from approximately $90/ton a week earlier, further increasing the landed cost of Taiwanese PVC.

Crude oil has recently retreated, however. Brent fell for a third consecutive session on September 18 after rising above $108/bbl earlier in the week. Expectations of a partial recovery in Saudi export capacity helped reduce immediate supply concerns.

Despite the recent decline, crude remains above $100/bbl, while supply and shipping risks continue around the Strait of Hormuz and the wider Middle East. A sustained decline in oil prices could eventually ease naphtha and ethylene costs, potentially limiting further PVC increases. So far, this relief has not significantly reached the ethylene market.

Buyer resistance limits further gains

Demand remains the main counterweight to higher production costs.

Buyers in Southeast Asia and India continue to resist elevated PVC offers and are largely following a needs-based purchasing strategy. Chinese exporters are also facing resistance from overseas buyers as higher resin prices combine with increased freight costs.

Indian converters remain cautious about taking expensive import cargoes and building inventories, while weak downstream consumption continues to limit buying activity across Southeast Asia.

October pricing decision in focus

Asian PVC markets are entering the October pricing cycle with sellers supported by high replacement costs but facing continued resistance from buyers.

The expected size of the Taiwanese producer's October increase, together with buyer acceptance, will be important in determining whether the regional PVC rally can extend further.

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