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Export PVC prices out of China provide competitive edge

by Merve Madakbaşı -
  • 02/04/2021 (03:59)
An increasing number of export PVC offers from China have found their way to Southeast Asia, India, Turkey, and Egypt recently. This was a reflection of the weak trend observed in China’s domestic markets over the past two weeks. Slow demand and falling Dalian futures weighed down on local prices in China, unlike the firm scene for imports.

“Chinese producers have ramped up exports since demand at their own market is muted. Increasing PVC exports show resemblance with the flow of PPH cargos from the country to more profitable outlets,” players opined.

FOB China offers lost $30-40/ton in two weeks

The weekly average data from ChemOrbis suggested that export ethylene-based PVC prices on FOB China basis retreated by $40/ton in total compared to mid-March. Acetylene-based prices lost $30/ton in the same period, meanwhile, as tight carbide supply partially offset the pressure from tepid demand in the domestic market.

Export PVC Prices – FOB China

Falling Dalian futures kept demand at a bare minimum

Chinese PVC buyers opted to adopt a waiting stance after wrapping up their April purchases in the first half of March, which caused a gradual slowdown in domestic buying appetite.

Adding to the weakness, Dalian PVC futures dropped by around CNY230/ton ($75/ton) in total during the first half of this week before paring some of its losses on Thursday.

Nonetheless, a lack of deep-sea US cargos coupled with planned turnarounds for spring in Asia continued to support China’s import markets. Several PVC units are readying to go offline in Taiwan, South Korea, and India.

Chinese offers formed the low ends in SEA, India

On the contrary to the steady pricing policies of most Northeast Asian suppliers in Asia, Chinese sellers approached the market with trimmed export offers. This was mainly because stalled demand at home prompted producers to cut their export prices to the region. A source from a Chinese producer affirmed, “We prefer to focus more on exports as overseas markets are way higher than the local offer levels.”

Chinese PVC cargos mostly faced lackluster demand from Indian consumers due to more scrutiny over the anti-dumping duty at ports, as a side note.

Mediterranean markets also received attractive offers

The import markets of Turkey and Egypt also witnessed competitive offers from China with not many deals being confirmed for these distant cargos.

Chinese PVC offers posted gradual drops during the last couple of weeks in response to mild demand in both markets. Still, the impact was limited given the ongoing absence of American import cargos despite gradually improving production in the aftermath of the polar storm in February.

A Turkish profile maker said, “We are shying away from materials with long delivery terms regardless of their competitiveness since we see medium-term outlook foggy.” A couple of sell ideas hovered around $1900/ton for US K67 versus Chinese offers at/close to $1800/ton CIF Turkey this week.

Egyptian participants noted, “US K67 offers started to re-appear slowly. However, they lack competitive power against some Chinese offers below the $1650/ton CIF Egypt threshold since allocations remain limited.”
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