Local PVC Price Trend In China Remained On The Same Trajectory For Several Weeks, Players Shared Positive Pricing Outlook
- Local PVC prices maintained last week’s trend
- Demand in the local and export market showed contradicting situation
- Local PVC prices still have room to increase in the upcoming weeks
On the week commencing June 1, local acetylene and ethylene-based PVC prices in China remained on the upward trend for several weeks, as such, players believe that the current trend would sustain onwards. From the producers’ end, offers for acetylene-based PVC increased between CNY50-200/ton ($7-28/ton) and between CNY100-200/ton ($14-28/ton) for ethylene-based PVC. All compared to last week’s levels. Several factors noted as the supporting factors behind the upward price adjustments. Recently, the Chinese government has given many stimuli to support economic recovery. A lot of money has been injected to the market and most of it is heading to the stock market or futures market. As a result, PVC prices in the futures market have been firm lately which lead to upward price adjustment in the spot market. Besides, limited supply in the market stemming from maintenance shutdown also supported the price increases. However, a Chinese trader maintained the offers for acetylene-based PVC stable over the week despite the increases in the futures market. The trader stated that last week’s prices were already high and the company could sense buyers’ resistance towards the offers. To the export market, an acetylene-based PVC producer maintained the offers stable from last week, at $765/ton on LC at sight, FOB China basis.
Demand for PVC resins in the local market is reportedly healthy. SSESSMENTS.COM was told that demand from the infrastructure sector is strong as the current weather is completely supporting the outdoor activity, not too cold or too hot. However, in the export market, demand remains subdued on the back of sufficient inventory in the market amid the slow end-products sales. On the supply front, as of June 1, inventory level of acetylene-based PVC in coastal China reported at 332,900 tons, decreased by 34,500 tons from last week’s level. A reduction of 16,800 tons recorded in South China, stood at 83,000 tons. In East China, the inventory digested by 17,700 tons, stood at 249,900 tons.
Looking ahead, most of Chinese PVC market players believe that local prices will remain on an upward trajectory. Players opined that local PVC prices still have some room to increase between CNY100-250/ton ($14-35/ton) in the upcoming weeks, taking into account the firm feedstock prices and the gradual recovery of downstream demand amid the supply shortage, as stated to SSESSMENTS.COM.
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