SE Asia PVC Gives Up Nearly Two-Thirds of War-Era Gains as Market Fundamentals Weigh on Prices

Southeast Asia’s import PVC market has continued its downward correction, with prices now surrendering nearly 66% of the sharp gains recorded during the geopolitical rally earlier this year. As supply concerns ease and demand remains sluggish, market sentiment has shifted decisively toward bearish fundamentals.

Import PVC K67-68 prices in Southeast Asia surged dramatically between late February and March, climbing from around $690/ton to a peak of approximately $1045/ton CIF. The rally was largely driven by concerns over supply disruptions and rising costs linked to tensions in the Middle East.

Since reaching that peak, however, the market has steadily retreated. Current import prices have fallen to around $812/ton CIF Southeast Asia, representing a decline of roughly 22% from the March high. As a result, nearly two-thirds of the earlier war-related price increase has been erased, leaving prices only modestly above levels seen before the conflict.

Sellers Adjust to Changing Market Conditions

The correction has accelerated in recent weeks as suppliers responded to weakening demand and fading geopolitical risk premiums. A major Taiwanese producer initiated substantial reductions in its monthly PVC offers, followed by an additional downward revision, prompting other suppliers to lower their prices to remain competitive.

Chinese exporters, along with suppliers from other origins, have increasingly reduced offers as they compete for market share in a region where buying interest remains limited. These adjustments have pushed import PVC prices to their lowest levels in several months.

Supply Remains Comfortable While Demand Stays Weak

A key factor behind the market decline has been the growing mismatch between supply and demand. Regional availability remains ample, supported by steady exports from China as well as additional cargoes from countries such as the United States and Japan.

At the same time, buyers across Southeast Asia continue to show little urgency to replenish inventories. Many processors believe prices have not yet reached their bottom and therefore prefer to postpone purchases wherever possible. Most transactions are currently limited to immediate production requirements rather than forward stocking.

Market participants also report increasingly aggressive negotiations, with buyers seeking lower price levels before committing to new cargoes.

Feedstock Markets Add Further Pressure

The weakness in PVC has been reinforced by softer upstream markets. Ethylene and VCM prices have declined significantly over recent months, reducing production costs and weakening cost support for PVC producers.

Ample feedstock availability and slower procurement activity have also contributed to concerns about oversupply throughout the value chain. Although crude oil prices have recovered somewhat from recent lows, they remain well below the levels that supported the strong rally earlier in the year.

Further Downside Still Possible

While Southeast Asian PVC prices remain slightly above pre-conflict levels, the majority of the war-related premium has already disappeared. With demand still weak, supply remaining abundant, and feedstock markets showing limited strength, many market participants believe additional downside cannot be ruled out.

Unless regional buying activity improves significantly or fresh supply disruptions emerge, the market is likely to remain under pressure, with prices potentially moving closer to pre-war levels in the coming weeks.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.