Import PVC bounces back from multi-year lows in China, India.
Petrotahlil:Data from ChemOrbis Price Index suggest that PVC prices on CFR China/India basis have rebounded after reaching multi-year lows as rising supply concerns along with a few other bullish factors encouraged several Asian suppliers to adopt a firm stance on their offers.
Price hikes from Taiwan, Japan
A Japanese producer applied $15-30/ton hikes on its offers to India and China this week, citing its limited export allocations for May. A Taiwanese producer also lifted its PVC prices by $15/ton, saying, “We have received a good response from Indian buyers since we increased our offers.”
Following these price hikes, the weekly averages of PVC K67-68 prices on CFR China/India basis bounced back after hitting an almost three-year low, as can be seen in the below graph created by ChemOrbis Price Wizard.
Main driver of price rebound: Supply woes
In China’s local PVC market, the sentiment has already been improving since a deadly explosion occurred at a chemical industrial park in Jiangsu Province on March 21. Following the explosion, Chinese PVC sellers attempted to lift their export PVC prices, yet their price hikes met Indian buyers’ resistance at that time.
China’s PVC market has been shaken by another fatal explosion this week at Dongxing Chemical’s plant in the Inner Mongolia region, which has added to earlier supply concerns and helped sellers achieve their increase targets this time.
Besides the two explosions, the planned maintenance shutdowns at some PVC plants across Asia have also fueled concerns about supply limitations and attracted buyers to the market.
China’s surging futures and the crude oil rally
In addition to supply crunch indicators, rising futures in China, coupled with the crude oil rally, have also favored the upside of the PVC market.
On the Dalian Commodity Exchange, September PVC futures were CNY275/ton ($41/ton) higher on April 24 when compared to three weeks ago.
“Crude oil futures are hovering at around a six-month high, which should help the market maintain its firm sentiment,” a regional PVC trader opined.
Improving demand in India
Last but not least, a few PVC suppliers who regularly offer to the India market reported that demand from the country has picked up this week despite the ongoing general elections. “Demand in India is likely to be healthy as buyers are willing to replenish stocks before the monsoon starts,” noted a seller.
