- Largest ethylene-based PVC producer halted offers to the export market
- Demand was generally sluggish during the first quarter of 2020
- Local and export PVC offers predicted to decrease further
In January, local offers for acetylene-based PVC were on a downtrend and significant downward adjustment between CNY50-200/ton ($7-28/ton) was captured on the week commencing January 6. In the same week, a trader decided to raise local ethylene-based PVC offers by CNY50/ton ($7/ton) following the spike in crude oil prices and tight supply from the company’s end. By the following week, most local acetylene-based PVC were keeping the offers stable, with an exception of one producer that decided to reduce the offers between CNY50-80/ton ($7-11/ton) on a weekly comparison following the decreases in the futures market. Sources added that most producers have sold out ethylene-based PVC cargoes for January delivery by the week ending January 24 as buyers have prepared some inventory before the Lunar New Year holiday for production use upon resuming work. Moving to the first week of February, no fresh local and export offers were recorded as most suppliers preferred to monitor market development before releasing offers due to the Coronavirus concern. However, by the following week, a local producer offered local ethylene-based PVC cargoes at CNY100/ton ($14/ton) lower compared to the offer level before the Lunar New Year to test the market response, but no response received as most buyers have not returned to work. On the week commencing February 17, some traders’ offers for acetylene-based PVC captured at CNY6,250/ton ($885/ton) on cash, EXW China basis and including 13% VAT and room for negotiation was available to lure buyers, yet done deals remained scarce. By the last week of February, SSESSMENTS.COM noted that the lowest offers for acetylene-based PVC in North China on EXW basis had reached CNY5,850/ton-level owing to the capital pressure faced by local producers in the region.
In March, SSESSMENTS.COM’s noted that local acetylene and ethylene-based PVC offers were on a downtrend and the most notable decrement for local acetylene-based PVC offers captured in the final week of the month, which was between CNY50-300/ton ($7-42/ton). While for ethylene-based PVC, the local offers were adjusted significantly by CNY200/ton ($28/ton) in the first week of the month due to inventory pressure. Price changes were on a weekly comparison.
From the import market, January shipment offers for ethylene-based PVC from the leading Taiwanese PVC producer surfaced with an increment of $10/ton. While for February shipment, the offers from the leading Taiwanese PVC producer also increased by $20/ton. Likewise, February shipment offers for ethylene-based PVC of Japan origin edged higher by $20/ton. While for March shipment, the offers for ethylene-based PVC from the leading Taiwanese PVC producer increased by $10/ton. Following the leading Taiwanese PVC producer’s strategies, a Japanese PVC producer also increased the offers by $10/ton. All changes on a monthly comparison. However, SSESSMENTS.COM noted that a Japanese producer managed to conclude deals at $860/ton on LC at sight, CIF China Main port basis after revised down the offers for ethylene-based PVC by $10/ton compared to the initial offer level released on February 18.
While in the export market, sources reported to SSESSMENTS.COM that in February, a producer managed to conclude deals for acetylene-based PVC at $780-790/ton on FOB basis, which was $80/ton lower from the producer’s offers in January. For week over week comparison from January to March, export acetylene-based PVC offers were recorded stable to decrease between $10-30/ton. On March 30, one of the largest acetylene-based in China halted the offers to the export market due to a spike in Coronavirus cases worldwide that have led to significant demand decreases. While on March 31, a Chinese PVC producer lowered export offers for ethylene-based PVC between $20-30/ton on a weekly comparison. The producer stated that the company also considered halting the offers to the export market due to sluggish demand as several countries implemented lockdown.
SSESSMENTS.COM noted that the PVC demand in China was generally sluggish in the first quarter of 2020 affected by the Lunar New Year holiday, sufficient inventory on hand, slow sales for finished products as well as the Coronavirus issues. Following the outbreak, China’s government extended the Lunar New Year holiday until February 2, that was originally from January 24 to January 30 while some companies remained closed until February 9. During February 3-7, most workers in Shanghai, Jiangsu Province, Zhejiang Province, Guangdong Province, and Chongqing were working from home or on holiday depending on the company’s policy. Moreover, buyers had no confidence in making purchases as PVC futures prices for May 2020 settlement in the Dalian Commodity Exchange have fallen as much as CNY1,125 ($159/ton) in March. Positive demand for ethylene-based PVC was only reported in the third week of January due to the replenishment activities made by converters who need to build some stocks for Lunar New Year holiday combined with the tight supply in the market during that period.
Pertaining to the outlook, market players predict that local and export PVC offers may decrease further as the current market situation is affected by several factors such as bearish crude oil prices, global economy slowdown and the Coronavirus pandemic. While the demand, SSESSMENTS.COM was told that it is predicted to remain soft in the upcoming weeks as most buyers prefer the wait-and-see stance amid the market uncertainty.
Range of local PVC offers in January 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 | 6,550-7,050 | 821-884 | EXW |
| China | Acetylene-based | Sold | 6,650 | 834 | EXW |
| China | Ethylene-based | Offer Given | 7,150-7,200 | 896-902 | EXW |
| China | Ethylene-based | Offer Given | 7,200-7,400 | 902-928 | FD |
| China | Ethylene-based | Sold | 7,200 | 902 | FD |
Range of import ethylene-based PVC offers in January on LC at sight, CIF/CFR China Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| Japan | Offer Given | 860-870 |
| Japan | Sold | 870 |
| Taiwan | Offer Given | 860-890 |
| USA | Sold | 840 |
Range of export acetylene-based PVC offers in January on LC at sight, FOB China basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| China | Offer Given | 805-870 |
| China | Sold | 860 |
Range of local PVC offers in February 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 | Delivery Location |
|---|
| China | Acetylene-based | Offer Given | 6,000-6,450 | 752-808 | EXW | China |
| China | Acetylene-based | Sell Idea | 6,200-6,350 | 777-796 | EXW | China |
| China | Acetylene-based | Offer Given | 6,000-6,100 | 752-765 | EXW | East China |
| China | Acetylene-based | Offer Given | 5,850 | 733 | EXW | North China |
| China | Acetylene-based | Offer Given | 6,200-6,250 | 777-783 | EXW | South China |
| China | Ethylene-based | Offer Given | 6,900-7,050 | 865-884 | EXW | China |
| China | Ethylene-based | Offer Given | 6,800 | 852 | FD | China |
Range of import ethylene-based PVC offers in February on LC at sight, CIF/CFR China Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| Japan | Offer Given | 870 |
| Japan | Sold | 860 |
| Taiwan | Offer Given | 870-910 |
| Taiwan | Price List | 900 |
| Taiwan | Sold | 860-870 |
| USA | Offer Given | 890-900 |
| USA | Sold | 890-900 |
Range of export PVC offers in February on LC at sight, FOB China basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Offer Given | 810-840 |
| China | Acetylene-based | Sold | 780-810 |
| China | Ethylene-based | Offer Given | 840 |
| China | Ethylene-based | Sell Idea | 830 |
| China | Ethylene-based | Sold | 830 |
Range of local PVC offers in March 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 | 5,100-6,400 | 639-802 | EXW |
| China | Acetylene-based | Offer Received | 5,200-5,300 | 652-664 | EXW |
| China | Acetylene-based | Sold | 5,200-6,000 | 652-752 | EXW |
| China | Ethylene-based | Offer Given | 6,300-7,100 | 790-890 | EXW |
| China | Ethylene-based | Offer Given | 5,550-6,800 | 696-852 | FD |
| China | Ethylene-based | Offer Received | 5,600 | 702 | EXW |
| China | Ethylene-based | Offer Received | 5,900 | 739 | FD |
| China | Ethylene-based | Bid Received | 5,100-5,200 | 639-652 | FD |
| China | Ethylene-based | Sold | 6,750-7,100 | 846-890 | EXW |
| China | Ethylene-based | Sold | 5,500-5,550 | 689-696 | FD |
Range of import ethylene-based PVC offers in March on LC at sight, CIF China Main Port basis
| Origin | Transaction Type | Offers (USD/ton) |
|---|
| Japan | Offer Given | 810 |
| Japan | Offer Received | 860 |
| Japan | Sold | 810 |
| Taiwan | Offer Given | 810-820 |
Range of export acetylene-based PVC offers in March on LC at sight, FOB China basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| China | Acetylene-based | Offer Given | 750-825 |
| China | Acetylene-based | Bid Received | 740-750 |
| China | Acetylene-based | Sell Idea | 770 |
| China | Acetylene-based | Sold | 790 |
| China | Ethylene-based | Offer Given | 770-820 |
Tags: Asia Pacific,China,English,NEA,PVC,Quarterly
Published on April 8, 2020 7:24 PM (GMT+8)
Last Updated on April 8, 2020 7:24 PM (GMT+8)
