China’s PVC Prices Gained Encouragement To Shine Despite Unmoved Demand
- Local PVC offers gained support from futures prices and supply conditions
- Demand remains sluggish despite notable reduction in supply
- Players believe that August shipment offers will decline considering demand conditions
Chinese market players contacted by SSESSMENTS.COM cited that local PVC prices have gained encouragement to shine despite the unmoved demand. On the week starting July 6, local offers for acetylene-based PVC cargoes from producers and traders were stable to increase by CNY100-150/ton ($14-21/ton). Meanwhile, offers for ethylene-based PVC from a local producer were also hiked by CNY100/ton ($14/ton). Players stated that firm local PVC prices are linked with the higher futures market prices and low inventory levels in producers and traders’ hands. In the import market, most players are now just waiting for August shipment offers from the leading Taiwanese PVC producer. To the export market, most acetylene-based PVC producers are unable to raise the offers due to demand conditions; hence, they decided to maintain the stable offer levels. All price changes compared to last week’s level.
This week, the overall demand for PVC resins in China remains sluggish despite a huge inventory decrease in southern areas. Traders cited that higher prices coupled with the traditional low season has pushed buyers to the sidelines. Similarly, demand in the export market is slow as well owing to the unworkable prices, particularly in the India market. On the supply side, SSESSMENTS.COM noted that there are contrast movements of inventory in East and South China. As of Monday morning (July 6), the coastal inventory of acetylene-based PVC recorded at 276,100 tons, a reduction of 9,900 tons from last week. In East China, the inventory stood at 216,600 tons, increased by 1,600 tons as an impact of the slow sales for finished products amid the traditional low season. While in South China, the inventory recorded at 59,500 tons, a significant drop of 11,500 tons supported by a considerable amount of purchases made by some big converters in the area.
For the outlook, the majority of market players believe that local PVC prices will likely remain stable to softer. In terms of demand, no sign of improvement is seen so far. Regarding August shipment, some players expressed opinion to SSESSMENTS.COM that the offers are likely to be adjusted around $20-50/ton lower from July on the back of waning demand in China and other countries.
