- China PVC inventories continuously decreased as fuelled by construction demand
- Booming construction sector upholds sales in the domestic market, prices on a rally
- Pricing outlook firm on tight supply, robust demand
China polyvinyl chloride (PVC) market faced immense upward pressure in June from tightening supply fuelled by accelerating demand in the construction sector and rising feedstock costs, despite concern over the second wave of Coronavirus infections. During the month, China’s domestic and import PVC prices were largely taking cues from futures price movements, tightness in supply, and demand conditions. On the week commencing June 1, several producers in China have separately announced increases of CNY50-200/ton ($7-28/ton) for local acetylene-based PVC cargoes and between CNY100-200/ton ($14-28/ton) for ethylene-based PVC cargoes from a week earlier, citing an upswing in the futures market and relatively tight supply in the market. In contrast, a Chinese trader opted to roll over offers for local acetylene-based PVC cargoes as compared to the same period as buyers showed a strong resistance towards higher prices. Moving to the second week, China’s domestic PVC prices remained firm as tight supply lent support, despite futures prices took a breather from its rally. During the week, SSESSMENTS.COM was informed that local PVC offers in China recorded stable to firmer by CNY200/ton ($28/ton) on a weekly basis.
Local PVC prices in China were continuing their trend in the third week of June, riding on strong gains in the futures market. As compared to a week earlier, local acetylene-based PVC offers were stable to a slight increase of CNY50/ton ($7/ton), while offers for local ethylene-based PVC were available at CNY30/ton ($4.2/ton) higher. In the final week of June, the majority of Chinese suppliers set off a round of price cuts to the domestic market due to softer futures prices. Local acetylene-based PVC offers were down between CNY50-100/ton ($7-14/ton) on the weekly comparison. In contrast, some traders maintained their offers for local ethylene-based PVC cargoes stable in the absence of inventory pressure. On a weekly basis, China’s export PVC prices held largely stable in June, taking a breather after recovering from a significant uptick in May. Previously, suppliers targeted higher numbers but have met with strong buyers’ resistance. Consequently, most suppliers opted to keep offers stable over the month, while some stopped offering materials to overseas market temporarily due to strong buyers’ resistance toward the price hikes.
From the import market, SSESSMENTS.COM’s pricing database showed that most foreign producers announced higher offers for July shipment as crude oil prices have rebounded on stabilizing fuel demand prospects. As compared to the previous month, the leading Taiwanese PVC producer announced July shipment offers for ethylene-based PVC with an increase of $90/ton and a volume discount of $10/ton was applicable for purchases at 500 tons and above. Similarly, July shipment offers from a Japanese producer posted a significant increase of $100/ton, while offers for July shipment from a South Korean producer were available between $90-120/ton higher compared to June shipment.
SSESSMENTS.COM data noted that China PVC market has been showing signs of a recovery driven by strong demand in the construction sector as the world’s second-biggest economy began to recover after easing restrictions imposed earlier in the year to curb the spread of coronavirus. Production at Chinese converters, particularly for construction materials, has picked up sharply since May boosted by a revival of end-users consumption. However, in the second half of the month, market activity started to slow down as converters back to the sidelines, after securing sufficient volumes in the past few weeks. Besides, the majority of buyers refrained from purchasing in anticipation of greater falls in prices since prices have been moving higher rapidly. In the final week of June, activity in China’s PVC market was muted, with limited spot trades taking place as most players were away from their desks for the Dragon Boat Festival holiday, which falls on June 25 and lasts until June 27. Similarly, China’s export markets have not yet strengthened, as the spread of the deadly disease carried serious risks for the global economy. Supply in China’s domestic PVC market remained tight on the back of a slew of turnarounds scheduled at local plants and striking downstream demand. As of June 22, the inventory level of acetylene-based PVC in coastal China recorded at 288,800 tons, posting a reduction of 4,000 tons as compared to a week earlier. As compared to the beginning of the month (June 1), the figure showed a significant reduction of 44,100 tons. On the plant news, China’s Xinjiang Zhongtai Chemical Co Ltd has reportedly delayed maintenance at its PVC plant. The plant with a capacity of 1,100,000 tons/year will be shut in August 2020 for around 7-15 days.
For the outlook, market players in China voiced out to SSESSMENTS.COM that a further price increase is a viable option, albeit seasonal slowdown approaches. Spot prices are expected to remain buoyed in the days to come on the back of robust demand and a regional supply crunch.
Range of local PVC offers between June 1 to June 5 on cash, EXW/FD China basis (including 13% VAT in CNY term, excluding VAT in USD term)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton | Delivery Term |
|---|
| China | Acetylene-based | Offer Given | 5,900-6,270 | 738-784 | EXW |
| China | Acetylene-based | Sell Idea | 5,900-5,950 | 738-745 | EXW |
| China | Acetylene-based | Sold | 6,150-6,270 | 770-784 | EXW |
| China | Ethylene-based | Offer Given | 6,400-6,900 | 801-863 | EXW |
| China | Ethylene-based | Offer Given | 6,900 | 863 | EXW |
| China | Ethylene-based | Offer Given | 6,970 | 872 | FD |
| China | Ethylene-based | Sold | 6,900 | 863 | EXW |
| China | Ethylene-based | Sold | 6,970 | 872 | FD |
Range of import PVC offers between June 1 to June 5 on LC at sight, CFR China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| India | Ethylene-based | Offer Given | 700 |
Range of export PVC offers between June 1 to June 5 on LC at sight, FOB China basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Offer Given | 765 |
Range of local/localized PVC offers between June 8 to June 12 on cash, EXW/FD China basis (including 13% VAT in CNY term, excluding VAT in USD term)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton | Delivery Term |
|---|
| China | Acetylene-based | Offer Given | 5,800-6,400 | 726-801 | EXW |
| Brazil | Ethylene-based | Offer Given | 6,200 | 776 | EXW |
| China | Ethylene-based | Offer Given | 6,800-6,970 | 851-872 | EXW |
| China | Ethylene-based | Offer Given | 6,970 | 872 | FD |
| Columbia | Ethylene-based | Offer Given | 6,200 | 776 | EXW |
| Mexico | Ethylene-based | Offer Given | 6,200 | 776 | EXW |
| Thailand | Ethylene-based | Offer Given | 6,250 | 998 | EXW |
Range of import PVC offers between June 8 to June 12 on LC at sight, CIF/CFR China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Term |
|---|
| Japan | Ethylene-based | Sell Idea | 780-790 | CIF |
| Taiwan | Ethylene-based | Offer Given | 790* | CFR |
| Taiwan | Ethylene-based | Offer Received | 790-800 | CFR |
Description: *Offers for July shipment
Range of export PVC offers between June 8 to June 12 on LC at sight, FOB China basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Sell Idea | 720-760 |
| China | Acetylene-based | Offer Given | 790-830 |
Range of local PVC offers between June 15 to June 19 on cash, EXW/FD China basis (including 13% VAT in CNY term, excluding VAT in USD term)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton | Delivery Term |
|---|
| China | Acetylene-based | Offer Given | 5,800-6,400 | 726-801 | EXW |
| China | Ethylene-based | Offer Given | 7,000 | 876 | FD |
| China | Ethylene-based | Sold | 7,000 | 876 | FD |
Range of import PVC offers between June 15 to June 19 on LC at sight, CIF/CFR China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Term |
|---|
| Indonesia | Ethylene-based | Bid Received | 770 | CIF |
| Indonesia | Ethylene-based | Offer Given | 780 | CIF |
| Indonesia | Ethylene-based | Sold | 780-800 | CIF |
| Japan | Ethylene-based | Offer Given | 780-810* | CIF |
| Japan | Ethylene-based | Sold | 780 | CIF |
| South Korea | Ethylene-based | Offer Given | 780*-800* | CIF |
| South Korea | Ethylene-based | Sell Idea | 750* | CIF |
| Taiwan | Ethylene-based | Offer Given | 820 | CFR |
| Taiwan | Ethylene-based | Offer Given | 790 | CIF |
| USA | Ethylene-based | Sold | 750 | CIF |
Description: *Offers for July shipment
Range of export PVC offers between June 15 to June 19 on LC at sight, FOB China basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Sell Idea | 790-800 |
Range of local PVC offers between June 22 to June 26 on cash, EXW/FD China basis (including 13% VAT in CNY term, excluding VAT in USD term)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton | Delivery Term |
|---|
| China | Acetylene-based | Offer Given | 6,150-6,380 | 770-798 | EXW |
| China | Acetylene-based | Sell Idea | 6,350-6,400 | 795-801 | EXW |
| China | Ethylene-based | Offer Given | 7,000 | 876 | FD |
| China | Ethylene-based | Offer Given | 7,050 | 882 | EXW |
| China | Ethylene-based | Sold | 7,000 | 876 | FD |
Range of import PVC offers between June 22 to June 26 on LC at sight, CIF/CFR China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Term |
|---|
| South Korea | Ethylene-based | Offer Given | 800* | CIF |
| Taiwan | Ethylene-based | Price List | 820 | CFR |
| Taiwan | Ethylene-based | Offer Given | 820 | CFR |
Description: *Offers for July shipment
Range of export PVC offers between June 22 to June 26 on LC at sight, FOB China basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Sell Idea | 800 |
Range of local PVC offers between June 29 to June 30 on cash, EXW/FD China basis (including 13% VAT in CNY term, excluding VAT in USD term)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton | Delivery Term |
|---|
| China | Acetylene-based | Offer Given | 6,150-6,300 | 770-788 | EXW |
| China | Ethylene-based | Offer Given | 6,900-6,950 | 863-870 | FD |
| China | Ethylene-based | Sold | 6,900 | 863 | FD |
Range of export PVC offers between June 29 to June 30 on LC at sight, FOB China basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Offer Given | 785 |
Tags: Asia Pacific,China,English,Monthly,NEA,PVC
Published on July 6, 2020 4:08 PM (GMT+8)
Last Updated on July 6, 2020 6:13 PM (GMT+8)
