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Gap between acetylene and ethylene PVC widens in China

by ChemOrbis Editorial Team -
  • 06/12/2016 (09:59)
In China, the sentiment for acetylene-based PVC prices has softened as of last week after reaching the highest level seen since mid-November 2010, according to weekly average levels on ChemOrbis Price Wizard. The softening was led by slowing demand in line with the beginning of off-season for PVC applications as well as losses in January PVC futures on the Dalian Commodity Exchange in the last two weeks. Some players also reported that acetylene-based offers had already reached its peak levels.

Ethylene-based PVC prices, meanwhile, remained mostly stable during the same period. Currently, ethylene-based PVC is carrying a premium of around $100/ton over acetylene-based PVC, according to the Prize Wizard.

“PVC prices are decreasing in the Chinese local market due to softening future prices. In addition, downstream buyers had previously bought a lot when prices were on an upward trend. Hence, they are not interested to buy now and are showing resistance. Traders are currently focusing on clearing their inventories. Even though suppliers’ operating rates are still high, we are not positive about the market outlook as the market has entered off-season,” said a local producer source.

“Acetylene-based PVC producers and traders are clearing their inventories nowadays and demand is obviously slower in the North. The market will be on a downward momentum in December as buyers will not rush to buy. There are fewer done deals,” commented a source from another local producer.

Last week, a plastic end manufacturer also reported that supply in China is still tight; however, local PVC prices have witnessed some decreases recently due to weaker futures prices.

A different local producer also reported that demand is not good in the local market especially in the Northern part of China due to winter season, adding that players are reducing their operating rates and they expect to see some correction on prices in the upcoming period.

Market players’ expectations mostly center on a bearish note for local PVC prices in China due to weakening demand in line with off-season. Some also argued that increased amounts of PVC cargoes from different origins have reportedly entered China recently, which may ease supply levels a bit in country in the upcoming period.
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