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China’s domestic PVC market remains soft for fifth straight week

by Merve Sezgün - msezgun@chemorbis.com
  • 11/01/2021 (12:08)
In China, the domestic PVC market has been on a downward trajectory since prices hit record highs in the week starting on December 7. Demand slowed down last month amid a year-end lull and buyers’ growing resistance towards sky-high prices.

Restrictions on electricity usage and environmental inspections in some parts of the country also hindered demand in December. Local supplies started to improve while volatile PVC futures kept purchasing amounts limited.

Softening trend stretches into January

“Spot PVC offers in the domestic market have witnessed fresh drops this week amid falling futures. Demand from converters is lukewarm. Downstream players are operating at reduced rates,” a trader in Hangzhou reported to ChemOrbis.

May PVC futures on the Dalian Commodity Exchange settled CNY155/ton ($24/ton) lower at CNY6950/ton ($950/ton without VAT) on Monday, January 11.

According to ChemOrbis Price Index, the weekly average of ethylene-based PVC K67 prices on ex-warehouse China basis has lost 8.2% in five weeks while acetylene-based PVC prices have recorded a larger decrease of 15% over the same period.

Domestic offers are currently reported at CNY8000-8200/ton ($1093-1122/ton without VAT) for ethylene-based K67 and at CNY7150-7400/ton ($979-1013/ton without VAT) for acetylene-based K67, all on ex-warehouse China, cash including VAT basis.

Pre-holiday replenishment likely to be limited

Although demand has slightly picked up recently after the controls over environmental pollution and electricity use partially ended last week, players mostly expect the pre-holiday replenishment activities to be limited this year.

“Demand should improve to some extent ahead of the Chinese New Year holidays as buyers traditionally build some inventory before leaving their desks. However, we are not expecting to see strong demand this year amid the COVID-19 situation coupled with transportation issues,” a seller opined.
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