Acetylene based PVC faces downwards pressure in China
Source: ChemOrbis Price Index
Spot ethylene prices on CFR Northeast Asia basis moved up by $20/ton since the start of November. The gain was more notable at around $95/ton with respect to a month ago.
A source from a Chinese producer reported that they sold out their November shipment cargos and closed their export business for the month. “We continue to offer to the domestic market though. Meanwhile, we are mulling over conducting a 1 week turnaround at our plant in December although the date is yet to be set. We have not heard of any reduced output from carbide based PVC producers so far but it would not be surprising considering market talk that the government has issued new environmental policies,” the source stated.
A different PVC producer reported that demand is very weak now that winter started in North China and the low season for some PVC applications has begun “The prevailing prices stand below the same period of two years ago due to the slower economy and construction sector. We are not so optimistic about the market outlook over the short term and expect further drops for the latter part of November,” the seller commented.
A manufacturer reported weak end product demand given seasonal reasons. The buyer also blamed the slowdown of investment in property which resulted in lower PVC consumption. “Buyers refrain from building extra stocks which exerts pressure on producers to cut their offers. Nonetheless, we expect conventional PVC prices to gain stability towards the year end supported by higher ethylene prices. We are not optimistic about carbide based PVC for the future term though,” he argued.
“Overall trading activity continues to be sluggish and some acetylene based PVC makers are already facing losses. Some price levels are near production costs which may cause companies to trim down their operating rates,” a trader based in Shanghai mentioned.
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