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Acetylene based and ethylene based PVC trading at par in China

by ChemOrbis Editorial Team -
  • 15/11/2016 (09:43)
In China, acetylene based and ethylene based PVC prices are trading almost at par this week. The ongoing uptrend on local PVC prices was attributed mainly to the ongoing supply tightness in the country; followed by the surging PVC futures on the Dalian Commodity Exchange, environmental inspections and new transportation regulations carried out by the government which causes higher costs.

After posting significant increases last week, acetylene based PVC prices and ethylene based PVC prices became equal on the high end of the price range. The Chinese PVC market extended this firmer trend to this week as well. According to data from ChemOrbis Price Index, the premium ethylene based PVC prices carry over acetylene based PVC prices currently stands at its lowest levels since January 2015. Surging acetylene based prices coupled with the strong PVC prices in India may exert an upward pressure on ethylene based PVC prices, players argue.

This week, acetylene based PVC was reported within the range of CNY7800-8580/ton ($981-1079/ton without VAT) on an ex-warehouse China basis while ethylene based PVC prices were reported at CNY8300-8500/ton ($1044-1069/ton without VAT) with the same terms. On a weekly comparison, these ranges indicate increases of CNY200-600/ton ($29-88/ton) for ethylene based PVC and CNY180-500/ton ($26-73/ton) for acetylene based PVC.

An agent of a local producer said, “Acetylene based PVC prices are almost at par with ethylene based PVC. Despite ongoing increases on prices, demand remains stable. We think that Japanese producers will announce their prices with hikes as well, but we are not sure about how long this firming trend will last.”

A local producer stated, “Prices in China’s local market will continue to increase, therefore we think that the Taiwanese major’s new prices will be announced with hikes again. Transportation costs during winter season will also increase. We believe that this uptrend in prices will last until the end of the year.”

A local trader also pointed out that the current levels of local PVC prices are nearly at the same levels. He said, “Demand is weak now; some buyers are not making any purchases or running their plant at half capacity. Supply is tight due to environmental inspections and the new transportation rules.”

Meanwhile, India’s decision to replace high-denomination notes from circulation as of November 8 in order to combat corruption, black-market trade, and tax evasion has created different forecasts among PVC players. Some believe that the global PVC tightness will continue to support further hikes for December while others think that firmer prices will not be possible since market activities in India decelerated following this decision.
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