China’s PVC supplies tighten amid energy caps, fueling the uprun
Within the scope of the recent “dual control” energy consumption and efficiency measures, the Chinese government has asked several carbide-based PVC producers to shut operations or reduce output at their plants in Shandong, Xinjiang, Shaanxi, and Ningjia provinces. According to sources, these provinces consumed higher-than-planned energy in the first half of 2021.
Dalian futures rally on bullish sentiment
“Several producers not only for PVC but also many downstream applications have reduced operations for 2-to-5 days. A downstream manufacturer, Foshan, has been operating only 2 days a week. Accordingly, domestic PVC production has tightened further, and this has led to rallying PVC futures on Dalian as well as local and export prices,” said a local producer.
January PVC futures on the Dalian Commodity Exchange rallied in early week trading, registering a hefty weekly gain of CNY320/ton ($49/ton) as of September 22.
Domestic and export offers hit fresh highs
Higher coal costs and reduced output supported the local and export PVC markets, pushing prices to fresh highs this week.
According to ChemOrbis Price Index data, the weekly averages of PVC prices on FOB China basis rose to $1470/ton for the acetylene-based K67 and to $1490/ton for the ethylene-based K67, both setting fresh records.
In the local market, acetylene-based and ethylene-based K67 prices climbed CNY200-300/ton ($31-46/ton) on the week. As the uprun continues, the local market has also seen new historic highs.
Import prices yet to break the previous record
Import PVC K67 prices also climbed further this week amid the global supply dearth, yet they were yet to break their previous record, as data from ChemOrbis Price Index suggest.
ChemOrbis assessed import K67 prices $40-50/ton higher from last week at $1480-1520/ton CIF, cash. The weekly average of prices had hit an all-time high of $1550/ton CIF in April.
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