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Asian PVC markets shaken by fresh round of sharp hikes; prices reach new highs

by Merve Sezgün -
  • 30/09/2021 (03:02)
The PVC rally in Asia has once again gained momentum as China’s reduced output amid energy curbs has fueled the bullish price run. Imports to both India and Southeast Asia have turned extremely difficult from supplier countries in Northeast Asia because of the acute container crunch, meanwhile.

Data from ChemOrbis Price Index reveal that the weekly averages of import PVC K67 prices have surged to $1950/ton CIF India, $1710/ton CIF SEA, and $1625/ton CIF China. The averages witnessed significant hikes of $110/ton in India, $125/ton in China, and $245/ton in Southeast Asia when compared to last week. They all indicated new all-time highs, needless to say.

The sharpest weekly hikes have been recorded in Southeast Asia as the latest energy controls announced by the Chinese government have meant PVC output cuts which have further crimped availability in the region.

Import PVC K67 Prices CIF China - India - Southeast Asia

Prices surge 33-40% since 2H July

ChemOrbis data also suggest that the weekly averages of PVC K67 prices have witnessed cumulative gains of 40% in India, 34% in China, and 33% in Southeast Asia since the uptrend kicked off in the second half of July.

Import prices in India stayed at high premiums to the Southeast Asian and Chinese markets but the deltas narrowed considerably this week as the two regions tried to catch up. India’s import price gap with China fell from $345/ton in the previous week to $325/ton, while the delta with Southeast Asia shrunk to $240/ton from $375/ton. Still India offered better netbacks to Northeast Asian sellers than Southeast Asia and China.

Chinese producers hike export offers amid reduced production

Traders reported that Chinese offers in India and Southeast Asia dried up as the latest winter power consumption curbs announced by Beijing have slowed output and reduced exportable surpluses in the mainland.

Chinese producers raised FOB offers considerably during the week, but the difficulty in finding containers meant most of these offers were notional.

“The current issue is shipping as vessels and containers are too hard to find, especially to India. Most offers from China and Taiwan are on FOB basis, which makes it incumbent on the buyer to find containers, a difficult task in this market,” a trader based in India said.

In the meantime, cost support for China-based producers was strong as both crude oil and coal prices moved north.

“Coal supply is particularly short after the implementation of the energy dual control by the Chinese government. The shortage of coal has also forced carbide-PVC suppliers to reduce operating rates,” said a regional trader.
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