A Xiamen-based trader shared with SSESSMENTS.COM on the reason why the PVC inventory level in East and South China moves in reverse. As of Monday morning, June 22, the total inventories of acetylene-based PVC in coastal China dropped by 4,000 tons on the weekly comparison, stood at 288,800 tons. The inventory level in East China captured at 218,300 tons, digested by 4,500 tons from a week earlier. In contrast, the inventory level in South China increased by 500 tons as compared to the same period and recorded at 70,500 tons. As informed by the trader, the inventory level in Coastal China moves into a different direction as buyers still showed stiff resistance towards firm local PVC prices, especially in South China.
Further explained, most players in South China are traders, which have purchased a big volume of low prices imported PVC cargoes previously and currently waiting for the cargoes to arrive. At the same time, converters prefer to halt procurements activities in anticipation of lower import PVC cargoes. Moreover, most converters still have sufficient inventory on hand from the previous purchases, SSESSMENTS.COM noted. Taking this into account, the trader believes that buying sentiment in the country will be sluggish over the week.
In terms of pricing, following the drops in the futures market by Monday morning trading session, the trader decided to lower local acetylene-based PVC offers by CNY50-80/ton ($7-11/ton) compared to the last trading day. However, so far, buyers’ responses are cold. Hence, the trader opined that the market would be quieter this week and PVC prices still have room to decrease further, as stated to SSESSMENTS.COM.
