Chinese Market Players: Supply Condition To Act As Determiner For PVC Price Trend
- Significant adjustments were applied on July shipment PVC offers of various origins
- Demand for PVC in China shows a slight decline this week compared to the last two weeks
- Supply is tight due to the ongoing and upcoming maintenance shutdown at some producers’ plants
Chinese market players told SSESSMENTS.COM that supply conditions will act as a determiner for PVC price trend in the near term. This week, local acetylene-based PVC offers were stable to a slight increase of CNY50/ton ($7/ton) compared to last week following firmer futures prices. Meanwhile, offers for local ethylene-based PVC were adjusted up by CNY30/ton ($4/ton) compared to the same period. Most acetylene-based PVC producers in the country do not have offers to the export market this week either due to supply issues or unworkable offer levels last week. From the import market, significant upward adjustments were recorded for ethylene-based PVC of various origins as compared to June shipment. Offers from Japanese PVC producers increased by $100/ton while offers from Indonesia went up by $80/ton. Offers from a South Korean producer surfaced with an increment of $90/ton. For cargoes of US origin, deals were concluded at $750/ton on LC at sight, CIF China main port basis to the re-exporters.
Demand for PVC in China shows a slight decline this week compared to the last two weeks but is still considered quite good. Most buyers have stocked up and placed orders before, some producers informed SSESSMENTS.COM. End products sales are healthy as supported by infrastructure projects. On the supply side, the supply is tight due to the ongoing and upcoming maintenance shutdown at some producers’ plants. Most producers in the country also do not have inventory pressure. The total inventory level in coastal China stood at 292,800 tons as of Tuesday morning, decreased by 19,100 from last week’s level. In East China, the decreases were by 14,100 tons, hence, the inventory stood at 222,800 tons whereas inventory level in South China was 70,000 tons, down by 5,000 tons.
Although it is nearing the traditional low season for PVC in China, market players believe that chances for increases in local prices are still high. The players explained to SSESSMENTS.COM that since some producers are conducting as well as plan to conduct maintenance at the PVC plants, tight supply is expected to persist and provide support for firmer local PVC prices.
