Asian PVC Market Downbeat in April, Keeping Keen Eyes on Oil Surge

The latest steep increase in oil prices has diluted bearish expectations for Asian PVC (Polyvinyl Chloride) prices toward the termination of April 2023. At the start of the second week of April 2023, oil prices nudged higher in Asia, owing to the tighter supplies from OPEC amidst the announcement of production cuts in May 2023. However, the slow growth in the global economic outlook capped the PVC price momentum gains. The market players keep an eye on the anticipations of commodity prices at high levels.

In March, the weakness in the buyer appetite extended to the bottom of the PVC value chain, with sluggish end-user consumption in the key construction and packaging industry of the APAC Region. The high-interest rates and persistent impact of inflation caused high-cost pressure on the PVC production units. Meanwhile, the producers and traders opted to put high-cost pressure on the upstream Ethylene market, resulting in minimal to empty orders throughout March 2023.

Furthermore, the overall PVC price movement in the first week of April 2023 was low, backed by the prolonged slump in the offers from the downstream construction industry amidst stagnancy in the consumer purchasing sentiments in the region's real estate sector. As per the market analysis, the weak demand fundamentals, reduced supply, along with muted spot activity, market participants remained cautious and likely to maintain a bearish outlook for the first half of the month in the concerns of competitive market situations and high stock volumes. In India, the price of PVC for suspension grade K67 decreased by nearly 3% in the previous week.

As per ChemAnalyst, PVC prices are expected to show a slight surge in prices with a sharp rise in upstream crude oil costs. However, demand softening and lackluster market operational rates might weigh on the hike attempts in the Asian market in May and stabilize the commodity prices.