Taiwanese major’s July PVC pricing exceeds initial expectations
Details about July pricing
· Fresh PVC K67-68 offers up $100/ton at $840/ton CIF India and up $90/ton at $790/ton CIF China
· A $10/ton discount is obtainable for purchases at/above 500 tons
· For remote areas, only 50% of the allocation will be released
Factors playing a role in major producer’s firmer pricing
Tight PVC supply across Asia, continuing healthy demand from the key market India as well as the ongoing firmness in the China market were cited as the main factors pushing the major producer to apply hikes for another month.
Plus, the cost side has aided the sentiment across PVC markets recently.
According to ChemOrbis Price Wizard, spot ethylene and VCM prices on CFR China basis have closed the week that ended on June 5 with further increases to stand at $710 and $540/ton, respectively on the back of tightness.
Import PVC markets in India, China hit 10-week high
ChemOrbis Price Index shows that the weekly averages of import PVC prices in China and India have reached their highest levels recorded in the past two-and-a-half months.
Since the uptrend kicked off in the first half of May, PVC K67-68 offers on CIF China/India basis prices have posted total gains of $160/ton and $215/ton, respectively.
Is firming in India’s local PVC market just a reflection of higher imports?
Following the major producer’s visible hike, a few local producers in India also raised their local PVC K67-68 offers in order to follow up with higher prices in the import market. But this was not the only reason behind higher offers in the local market.
The ongoing PVC tightness inside India in line with the impact of the COVID-19 related lockdown has also given an upper hand to sellers although the monsoon season may temper demand.
India has started to gradually lift its nationwide lockdown as of this week by allowing restaurants, hotels and shopping malls to reopen. The country’s total emergence from the lockdown, meanwhile, marks the end-June.
Robust demand, firmer futures support China market
Ethylene and acetylene-based PVC prices in China have been steadily increasing since late April mainly due to robust demand, particularly from the pipe sector.
Plus, lower supply levels inside China in line with maintenance shutdowns coupled with firmer futures have also contributed to the firming trend.
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