Export PVC offers from China see first hike attempts since early Feb

Export PVC K67 offers out of China have witnessed slight increase attempts for the first time since the post-Chinese New Year week, although demand from the major export outlets remained lackluster.

Prices on FOB China, cash basis were $10-20/ton higher from last week to be quoted at $790-820/ton for the ethylene-based K67 and at $780-800/ton for the acetylene-based K67.

Data from ChemOrbis Price Wizard reveal that the weekly averages of FOB prices for both grades were standing at a four-month low last week.

Sellers renew confidence amid higher crude, reduced domestic supply

PVC sellers in China have renewed confidence since oil futures saw a sharp increase early last week. Following an unexpected output cut from OPEC, crude oil prices surged on Monday, April 3, while they have managed to sustain that rebound so far.

In the meantime, a slew of maintenance shutdowns at Chinese PVC plants has reduced domestic availability to some extent, and led to a stabilization in local prices this week. This has been another factor driving sellers to test the export markets with slightly higher offer levels.

“We are revising up our export PVC offers, with support from the stability in domestic markets. We are taking the opportunity of a price increase as export offers are still below domestic offers,” a China-based trader explained.

Another trader said, “Domestic PVC supply has reduced recently as there are more plants undergoing turnarounds in April. However, there is still some pressure stemming from plant restarts, including the Fujian Wanhua.”

Export demand too weak to support a rising market

While Chinese sellers attempted for hikes, demand from their major export outlets, including India, stayed sluggish amid ample availability and expectations of further price cuts from a major Taiwanese producer.

“The rise in crude oil prices has resulted in Chinese offers looking up but bids are mostly below the offers. Most players are waiting for the Taiwanese major to notify May prices before they commit to deals,” an Indian trader said.

Apart from the lack of demand, a few players pointed to some unconfirmed market talk that US sellers were likely to offer May cargoes at lower prices which could lead to buying opportunities in India ahead of the monsoon season.

A trader in Southeast Asia also noted, “Chinese traders are revising up offers as domestic market have mostly been stable. But demand is still not good, and buyers have kept away. Some regional markets are slower also due to the Ramadan lull.”

Taiwanese major likely to reveal May offers next week

According to some traders, the major Taiwanese producer may announce its new PVC offers for May shipments early next week, while others said it could wait till the Chinaplas expo to be over on April 20.

Most players expect a price cut of about $30-40/ton.

The major producer had notified $60-70/ton drops in its April PVC offers to Asian buyers. The price cuts had come in after three months of hikes in a row.