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Asian PVC retreats from historical highs; Egypt and Turkey follow suit

by Merve Sezgün -
  • 04/11/2021 (07:59)
Asian PVC markets have been rattled by China’s coal plunge and started to retreat from their all-time highs. Prices in China have seen significant drops since mid-October, dragging the other regional markets down. Following the plunge in Asia, the PVC rally in Egypt and Turkey has also faltered while the European market has retained its strength so far.

Import K67 down 14% in 3 weeks in China

PVC prices in China have extended losses into November amid the free-fall in Dalian futures, which were hit by the government intervention in record-high coal futures and spot prices.

ChemOrbis Price Index data reveal that the weekly average of import PVC K67 prices on CIF China basis has fallen around 14% since the downturn kicked off three weeks ago to reach $1750/ton. The market had reached a historical high of $2250/ton CIF before it started to retreat.

PVC K67 prices CIF China – CIF India – CIF Southeast Asia

China’s slump hits prices in SE Asia, India

Sentiment in Southeast Asia and India has been hit by tumbling prices in China, meanwhile. Both regions’ import PVC markets have retreated from their all-time highs.

“The sharp correction in prices could ease supplies from China to both Southeast Asia and India. Some players saw better availability of vessels and containers in Asia, which could be bearish for freight costs as well as import prices,” noted players.

Southeast Asia’s import K67 market has declined 4% from its historical high of $1850/ton CIF while prices in India have seen a smaller loss of 2.4% when compared to last week and their weekly average has reached $2000/ton CIF, cash.

“In India, the near-term outlook has turned slightly bearish as buyers hold out for the market to fall further. Southeast Asian players also expect prices to slide further, tracking the Chinese market,” traders said.

Demand concerns come to the fore in Turkey; the rally falters

In Turkey, concerns over fading demand have come to the forefront recently and the PVC rally has faltered. “Some converters prefer to sell PVC as it is more profitable than manufacturing goods,” said some buyers.

Relentless and supply-driven hikes through August-October have pushed buyers away. Adding to the scene have been the slump in Asian markets and the dramatic depreciation of the Turkish lira against the USD as it hindered the local business.

“Additional hikes have seen stiff resistance from consumers,” a seller said. Proving that, American PVC suppliers have had to step back from their initial targets of up to $2300/ton CIF.

“We think that prices have reached their ceiling. Players are not able to digest any further hikes as their competitive power has been largely dimmed in export outlets,” another seller also opined.

Egypt’s import PVC market down on tumbling prices from China

ChemOrbis data suggest that import PVC K67 prices in Egypt have lost 13% since they reached an all-time high two weeks ago. The downturn has been due to the plunge in Chinese offers. Thin buying appetite amid the ongoing weak trend has also driven prices lower this week, players noted.

“Players are cautiously watching the price changes as lower offers are expected given weak future contracts in China and slow global demand,” a distributor commented.

In the import market, offers for Chinese cargoes were notably down by $120-170/ton from last week to $1780-2120/ton CIF while US offers were steady to $20/ton down from last week at $2150-2230/ton CIF.
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