A Chinese ethylene-based PVC producer revealed its smart step in dealing with current market conditions. As informed to SSESSMENTS.COM, the ethylene-based PVC offers from the company’s end to the local market stand at CNY5,700/ton ($804/ton), down by CNY100/ton ($14/ton) from last week’s offers. The price reduction carried out in line with the lukewarm response from the market by the second half of April.
Even so, the producer has managed to sell the allocation for May delivery, hence, is not under pressure to release the inventory immediately. The producer then told SSESSMENTS.COM about particular news related to the entry of imported ethylene-based PVC into the Chinese market originating from India and the US at lower prices than local PVC cargoes. The fierce competition will occur if the news turns out to be accurate, especially for supplying downstream factories such as pipes, windows and doors manufacturers. The producer added, "Those India and US PVC cargoes can only be used in particular industries which accounts for 50% of the local PVC product usages. Meanwhile, other PVC applications such as flooring, wallpaper, film, insole etc., are still relying on local acetylene-based PVC and ethylene-based PVC cargoes."
Continuing with the said topic, the producer stated to SSESSMENTS.COM that PVC demand has not fully recovered because downstream factories are only running at 60% of total production capacity due to limited orders from the export market. If the raw materials price falls again, there is an opportunity where buyers will come in and take ethylene-based PVC resin. Trust in ethylene-based PVC as a raw material has been formed with a producer can deliver a delicate product with smoother production compared when using acetylene-based PVC materials. Also recently, buyers are lured by competitive offers for localized ethylene-based PVC cargoes of various origins. “Competition is getting fiercer and will put more pressure on acetylene-based PVC producers than the ethylene-based PVC producers,” the producer opined.
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