PVC downturn persists in China’s local market despite bullish imports

Petrotahlil : Local PVC prices in China have maintained their softening path recently, disregarding the fact that Asia’s import markets remain firm on the back of the continuing tightness of supply.

ChemOrbis Price Index suggests that China’s local PVC market has tracked a largely softer trend since mid May while PVC K67 prices on CIF China/India basis have recently reached their three-month high. Southeast Asia’s import PVC market, meanwhile, has hit its highest level since around mid January.

Trade war concerns hurt sentiment 

The escalating trade conflict between China and the US has hurt sentiment in the country’s PVC market, pushing buyers to the sidelines amid growing concerns over the near-term economic outlook.

“The local market has failed to shift direction despite tight supplies and firming import offers. Fading demand weighs on sentiment and discourages sellers from attempting to increase their offer levels,” a Chinese trader opined.

Import PVC supported by global tightness, India’s demand 

Import PVC prices in Asian markets, on the other hand, have witnessed a fresh round of gains following a major Taiwanese producer’s $40/ton hike on its July offers.

A regional producer noted, “We raised our prices further by $30/ton after concluding a good number of done deals last week. Demand is still encouraging in India. PVC might sustain its firmness as supply concerns are likely to remain in place over the near term.”

On the other side of the coin, some players commented that China’s fading demand, spot ethylene prices at a decade low in Asia and the rainy season in India and in some Southeast Asian countries might cushion the extent of any further price gains in the future.