Chinese PVC Market Players Highlighted Factors That Could Support Price Sustainability
- Local and import PVC offers stride in the same path
- Good demand observed in the domestic market, players stated factors behind
- Local PVC prices might increase around CNY200-300/ton ($28-42/ton) in the upcoming weeks
Chinese PVC market players highlighted factors that could support price sustainability in the days to come, SSESSMENTS.COM noted. On the week starting May 25, local and import PVC offers in the China market recorded on an uptrend. In the local market, offers for both acetylene-based and ethylene-based PVC from several producers were hiked between CNY50-300/ton ($7-42/ton) on a weekly comparison. Market players stated that the increments in local prices were propped up by some reasons, such as firmer futures market prices, tight supply stemming from maintenance shutdown, along with demand conditions. In the import market, June shipment offers for ethylene-based PVC cargoes of US origin to Chinese re-exporter increased between $40-50/ton from May shipment, with deals concluded at $675/ton on LC at sight, CIF China Main Port basis. Similar to the domestic market, the price increases in the export market were supported by tight supply on the supplier’s end. To the export market, a producer revealed that they did not give official offers and only asked their customers to submit bids, yet no deals concluded so far.
Demand-wise, Chinese market players told SSESSMENTS.COM that buying sentiment in the China market is quite good this week. Buyers are more willing to make purchases when they notice that the prices were on an uptrend almost throughout May. Besides, the downstream market has also gradually recovered due to demand from the real estate and infrastructure projects; hence, sales for PVC pipe, profile and other PVC end-products increased substantially. On the other side, good demand has led to supply shortage as most producers' plants are still under maintenance shutdown. Speaking of supply, as of May 25, inventory level of acetylene-based PVC in coastal China recorded at 367,400 tons, dropped by 29,400 tons. A reduction of 15,200 tons recorded in East China, stood at 267,600 tons. While in South China, the inventory stood at 99,800 tons, decreased by 14,200 tons. All compared to last week's levels.
In the upcoming weeks, Chinese market players believe that local PVC prices will likely to be stable or might increase further around CNY200-300/ton ($28-42/ton). One of the players voiced out to SSESSMENTS.COM that room for increment on PVC prices remain wide-open because local supply is relatively tight for both acetylene-based and ethylene-based PVC, import cargoes have yet to arrive in massive, healthy demand expected to sustain, and some policies that will be announced by the National People’s Congress; which is expected to stimulate the market.
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