SE Asia's local PVC markets all but erase war premiums, eye full reset in July

Southeast Asia’s domestic PVC markets continued to weaken during the week ending July 3, with prices moving closer to pre-conflict levels across the region. Lower feedstock costs, declining import prices, and subdued demand prompted local suppliers and distributors to offer further discounts in an effort to maintain sales momentum.

The latest corrections have significantly reduced the price gains generated during the Middle East conflict earlier this year. Domestic PVC prices in Thailand are now only marginally above pre-war levels, while Vietnam, Indonesia, and the Philippines have also seen most of their conflict-related premiums disappear.

The decline in local prices has largely followed developments in the import market, where PVC values have already returned to levels seen before the geopolitical rally. As replacement costs continue to fall, local sellers are finding it increasingly difficult to maintain higher price levels.

Despite the recent price reductions, buying activity remains sluggish. Many converters believe the market has not yet reached its bottom and continue to limit purchases to immediate requirements. Seasonal rains in several countries have also affected consumption from key downstream sectors, keeping trading activity muted.

Market participants reported that sellers have become more flexible in negotiations as they seek to secure orders in a weak demand environment. While inventories are generally manageable, ample supply and falling import costs continue to pressure domestic pricing.

Looking ahead, sentiment remains bearish. Competitive offers from overseas suppliers, particularly from China and the US, along with softer crude oil and ethylene markets, are expected to keep downward pressure on PVC prices. Many players are also awaiting the next regional benchmark announcements, which could trigger another round of reductions and potentially eliminate the remaining war-related premiums across Southeast Asia.

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