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Will shutdowns counterbalance slowing PVC demand in Asia?

by ChemOrbis Editorial Team -
  • 27/04/2016 (10:15)
Many players in Asia believe that PVC prices are nearing a peak amidst expectations that demand will slow down in line with the start of the monsoon season in India. However, there are different opinions as to whether this will have an impact on prices in May or June. Considering the shutdowns at both VCM and PVC plants in the coming months, players are considering whether supply limitations will counterbalance demand factors and support the PVC market.

Although two PVC plants have restarted in April, Japan’s Shin-Etsu and South Korea’s Hanwha are preparing for shutdowns that will last for 1 month at their plants in mid-May.

As for VCM, there are more shutdowns planned for the May-June period as South Korea’s Hanwha and Japan’s Kashima Vinyl and Tosoh are scheduled to be shut for maintenance. Spot VCM prices have risen constantly since the beginning of the year with support from the ongoing supply limitations.

Take a quick glance at ChemOrbis Production News for more detailed and up to date operation news in all regions.

Supplies remain tight not only in Asia, but also in Europe and North America. Particularly the recent explosion at a Mexican PVC producer is expected to help US suppliers remain firm on their export offers for another month while European players also expect to see its impact due to the fact that Mexico remains as the top import supplier of Europe and the third largest import supplier of Turkey.

On the other side of the coin, some players draw attention to the fact India’s approaching monsoon season in late May and fading PVC demand will make themselves felt on prices.

Plus, carbide based PVC is becoming increasingly competitive, reducing appetite for ethylene based PVC in China. A trader commented, “Trading activities for both ethylene and acetylene based PVC have slowed recently. However, buyers mostly prefer to secure acetylene based cargoes due to the widening price gap between the two products.”

In the midst of these opposing factors, players are wondering whether it will be tight supplies or slowing demand that will determine the near-term outlook.
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