Chinese PVC Market Players Highlighted Factors Behind Price Rebound In Domestic Market
- Local ethylene-based and acetylene-based PVC prices showed the same trend
- Digestion rate of local inventory increased as a result of better demand
- Chance for local PVC prices to rebound further is thin
Chinese PVC market players highlighted several factors behind the price rebound in the domestic market, SSESSMENTS.COM noted. For acetylene-based PVC, the local offers from some sellers were adjusted up between CNY50-100/ton ($7-14/ton) as driven by high costs of calcium carbide, traditional maintenance shutdown; which led to supply limitation, as well as consensus on firmer prices for the upstream producers. Likewise, local offers for ethylene-based PVC offers also moved higher between CNY50-200/ton ($7-28/ton). For this grade, the uptrend was triggered by the movement of acetylene-based PVC prices, tight supply as a result of the good sales in late April and early last week and crude oil prices that were on a stable to firmer note lately. Last but not least, the price increment for both grades moved in-line with the firmer futures market prices. All price changes are on a weekly comparison. From imports, US and South Korean ethylene-based PVC cargoes increased between $10-30/ton as compared to late April. Moreover, a distributor of a Japanese PVC producer notified that offers for June shipment would likely follow the adjustment made by the leading Taiwanese PVC producer. To the export market, the offers for both acetylene-based and ethylene-based PVC cargoes remained stable from last week.
As reported to SSESSMENTS.COM, the overall demand for PVC resins this week is considered as good. Buying sentiment has improved following the rebound in prices and the ongoing infrastructure projects. Due to this, a local ethylene-based PVC producer managed to sell all May allocation and has started to offer for June delivery. For end-products, the sales for PVC film is quite good currently. On the supply side, as of May 11, the total inventory of acetylene-based PVC in coastal China recorded at 411,200 tons, down by 18,800 tons. In East China, the inventory stood at 293,200 tons, a decrease of 2,800 tons. While in South China, the inventory level recorded at 118,000 tons, down by 16,000 tons. All compared to last week’s levels.
Looking ahead, the majority of Chinese market players believe that PVC prices will be hovering at the current level, citing that the room for another increment is small due to the arrival of import cargoes; which led to ample supply. Demand-wise, players opined to SSESSMENTS.COM that sentiment in the export market would gradually improve as the Coronavirus pandemic in other countries has begun to ease day by day.
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