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Background: Major regions and manufacturers in Asia this week reported lower than expected pre-sale prices for October.

The pre-sale price of Asian PVC market in October fell by $30 to $90 / ton compared with September, with CFR China down $50 at $850 / ton and CFR India down $90 at $910 / ton.  During the week, China’s Taiwan Formosa Plastics in October was quoted at US $840 / ton CFR China, US $910 / ton CFR India and US $790 / ton FOB Taiwan, which was reduced by US $90-180 / ton from September, and still much lower than the previous expectation by US $50.  The new offer also reflects the decline in market freight, it is reported that the pre-sale volume to India has been sold out, the customer said that the demand is good, and the current inventory in India is declining, India’s import volume in June was 192,000 tons, decreased to 177,900 tons in July, and is expected to be 113,000 tons in August. On the other hand, due to the sharp drop in price, the sales in China and Southeast Asia slowed down.  Indian market demand is expected to recover in October, but there are still concerns that American PVC will increase its export to India and even increase its pressure force and market competition in order to reduce PVC inventory.

PVC market prices in the United States remained stable, the market focused on the news of a possible strike by the American railway, the railway suspended the transportation of dangerous chemicals on September 12, and the plan to stop shipping containers on September 14-15 is affected by the possible strike.  According to preliminary US statistics, PVC exports surged 83% in August from July to 457.9 million pounds, while its domestic sales fell 1.3% to 970 million pounds. The increase in exports was partly due to improved logistics and transportation, as well as a market shift toward exports due to rising interest rates and high inflation.  The United States exported 1.23 million tons of PVC from January to July, up 1.5% year on year.

Spot prices in the European PVC market continued to be under pressure from weak demand, although high energy costs persisted but did not prevent producers from limiting price declines as buyers were able to import more priced spot.  We have heard from spot producers that the US import source price can be as low as $1000 / ton CFR, and another that the delivery price can be as low as €1000 / ton, while the local producer price can be as low as €1700 / ton, although negotiations can be as low as €1600 / ton.  This week the main European markets were priced at $960 / t CFR Turkey, $920 / t CFR Russia, and $1,290 / t FOB Northwest Europe.