Weather-Related Issues Affect China PVC Demand And Drag Local, Export Prices
- Local and export market established on the same trend
- China PVC demand remain lacklustre amid bad weather
- Players foresee price adjustment considering demand outlook
As SSESSMENTS.COM noted, weather-related issues have affected China PVC demand and dragged local as well as export prices. On the week commencing June 29, local offers for acetylene-based PVC offers via traders dropped between CNY50-100/ton ($7-14/ton). Likewise, offers for ethylene-based PVC offers from a local producer lowered by CNY50/ton ($7/ton). The producer cited the shift in China’s domestic demand amid the rainy season as the main trigger for a downward price correction. From imports, the leading Taiwanese PVC producer hinted that August shipment offers are more likely to be higher than July considering firm feedstock prices; which led to higher production cost coupled with low inventory on the producer’s end. In the export market, offers for acetylene-based PVC offers from another local producer trimmed by $10/ton. All price changes on a weekly comparison.
This week, domestic demand for PVC remains sluggish following the traditional low season for PVC in China as the rainy season checks in. Besides, floods in several areas have deteriorated market sentiment further, particularly in Southern and Eastern China where the digestion and operating rate are highly affected. At the same time, hot weather still strikes in some other areas in China, yet the impact is also not good for the construction sector because it slows down the operating rate. On the supply side, as of June 30, inventory level of acetylene-based PVC in coastal China recorded at 286,000 tons, digested by 2,800 tons. A reduction of 3,300 tons recorded in East China, stood at 215,000 tons. While in South China, the inventory stood at 71,000 tons, accumulated by 500 tons. All compared to last week's levels. On the plant news, market talks have it that there is an unexpected shutdown reported at Shaanxi Beiyuan Chemical Industry Group Co Ltd’s 1,100,000 tons/year PVC plant. However, the producer clarified that on the morning of June 30, the company's line B had a breaker trip, but now the line is already running normally.
Looking ahead, the majority of market players contacted by SSESSMENTS.COM opined that the domestic market will likely to remain slow in the upcoming week considering the traditional low season. As such, the chance for local PVC prices to decrease further is also high.
