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Local PVC prices retreat in China

by ChemOrbis Editorial Team - content@chemorbis.com
  • 23/01/2015 (16:26)
Players in China report that ethylene based PVC prices have posted decreases following the recent downward movement in the acetylene based PVC market.

A source from a local ethylene based PVC producer reported that they reduced their prices by CNY200-300/ton ($32-48/ton) to CNY5600-5700/ton ex-warehouse China, cash including VAT ($782-796/ton without VAT). The source stated, “We heard that acetylene based PVC producers also cut their prices in order to enhance their competitiveness. For the near term, we hope that local prices will not reduce further on the back of a major Taiwanese producer’s February increase in the import market.”

A source from another domestic ethylene based PVC producer said, “Local prices for conventional PVC posted decreases of CNY200-300/ton ($32-48/ton) following the recent drops in acetylene based PVC prices. We are not interested in resuming our export activities at the moment as local prices are still higher than exports even after the latest declines. For the coming month, supply from the US and Japan is expected to be reduced due to some maintenance shutdowns, which may help prices keep firm at their current levels. However, it is still difficult to make predictions for the near term because of fluctuating crude oil prices.”

A source from a third conventional PVC producer also reported that they lowered their local prices by CNY300-400/ton ($48-64/ton), stating, “Acetylene based PVC prices are also recording decreases in the local market. We are closely monitoring the market trend nowadays in order to see if we have a chance to resume our export business.”

A Shanghai-based trader stated, “Ethylene based PVC prices declined around CNY300-400/ton ($48-64/ton) week over week in the face of lower acetylene based PVC prices, which are being traded at a loss as producers are sacrificing their margins to regain competitiveness. Some acetylene based producers are still running their plants at high rates and are therefore facing some inventory pressure because of discouraging demand. We believe that prices will remain stable over the short term.”

In the acetylene based PVC market, a source from a local producer reported that they reduced their prices by CNY300/ton ($48/ton). “Demand is still disappointing and we are facing difficulties to conclude deals due to stiff competition from conventional PVC prices. We are not feeling optimistic regarding the demand outlook,” a source from the producer commented.

A trader in Shanghai added, “Local prices for acetylene based PVC have decreased to levels almost matching the May futures contracts on the Dalian Commodity Exchange, which is putting some pressure on ethylene based producers to lower their domestic prices and may make export business seem attractive again. However, we are not sure if the prevailing prices for acetylene based PVC will remain workable over the medium term as current spot prices should carry a larger premium compared with prices on the futures market.”

In China’s local market, ethylene based PVC k67 prices currently stand in the range of CNY5400-5700/ton ex-warehouse China, cash including VAT ($754-796/ton without VAT) while acetylene based PVC prices are reported at CNY5000-5400/ton with the same terms ($698-754/ton without VAT).

According to ChemOrbis Price Index, ethylene based PVC prices are down CNY300-500/ton ($48-80/ton) on the week while acetylene based prices retreated by CNY300-600/ton ($48-96/ton).
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