PVC market in China followed a stable to softer trend
Aug. 31, 2018
In China, the local PVC market followed a stable to softer trend for the second consecutive week. The import PVC market, meanwhile, witnessed no major changes in the week after the September announcement of a Taiwanese major, which indicated rollovers on the month.
Local prices for acetylene and ethylene-based PVC were mostly stable on the high ends while the low ends witnessed decreases of around $11-23/ton from last week. PVC futures on the Dalian Commodity Exchange posted a weekly decrease of CNY240/ton ($35/ton) as of August 29. Softer PVC prices were attributed to retreating futures prices as well as limited demand. Plus, lackluster activity in the import market and the uncertainty related to China-US trade war also weighed on the local sentiment. A trader commented, “Local PVC prices have moved lower this week in the face of softer futures prices coupled with slow demand. Although inventory levels remain low, the market is heading south as demand is unsupportive in the midst of concerns regarding the growing trade war.”
Overall import PVC k67 prices for Asian origins were flat from last week at $960-970/ton CIF, cash while an offer for US PVC stood at $860/ton CIF, which were not included in the price index. A global trader offering US PVC reported that they cut their prices by $10-20/ton on the week and commented, “We are seeking to divert our US PVC allocations from China to Southeast Asia nowadays. Chinese buyers are not showing interest in import transactions given escalating trade tensions while lower futures prices have also pushed buyers to the sidelines in the country.”
In other news, China removed PVC from the revised tariff list of US products which are subject to an additional 25% tariff effective from August 23.
Local PVC prices are believed to have room for further decreases, albeit in small amounts as demand is unsupportive while carbide costs are high and inventories are low. Plus, the increasing number of US PVC across Asian markets amidst the growing trade tension as well as tepid demand in India puts downward pressure on the market.