PVC price soars $100 a tonne
22 April 2002 00:00 [Source: ACN]
PVC prices for May have risen US$100/ tonne to US$720/tonne cfr
China after Japanese producers successfully concluded business at
Market players attributed the steep price hike to continuing tight
supply, high feedstock costs and a pick up in Chinese demand.
Negotiations for May delivery by other major Asian producers were
reportedly in the US$710-720/tonne cif China price range. April
business was earlier concluded at US$610-620/tonne cif China, up
US$80/ tonne from March.
Producers believed the bullish market sentiment was likely to be
sustained until the second half of the year, with prices expected
to remain above the US$700/tonne cif China level.
Buyers and traders agreed, pointing out that tight regional supply
was making it difficult to negotiate a price reduction.
The problem of snug availability is likely to worsen in the coming
months with several turnarounds scheduled for May and June. Three
Japanese producers - Taiyo Vinyl, Shin-Etsu Chemical and Kaneka -
which control more than 80% of Japanese PVC exports, will shut
their plants for maintenance during April-June (See table)
In South Korea, a boom in domestic markets brought on by the
economic rebound has led to a drastic drop in PVC exports.
LG Chem, for instance, which has two plants with a combined
capacity of 750000 tonne/year, plans to slash exports by half this
year, from 240000 tonne in 2001. Its exports in January-April this
year totalled less than 50000 tonne.
The recent spike in ethylene
dichloride (EDC) feedstock costs,
which have gone up US$50-70/tonne from March to more than
US$400/tonne cfr Asia in April, has also forced PVC producers to
ask for price increases.
Asian EDC imports from the US have declined considerably as a
severe chlorine shortage has forced EDC makers to cut operating
rates or shut down their plants.
In Chinese PVC markets, orders from exporters of finished goods to
the US have picked up due to the economic recovery.
Market players said Chinese demand for pipes and window profiles
have shot up due to a construction boom.
Chinese domestic PVC prices for April were Rmb7500/tonne last week,
up Rmb500/tonne from March.
'Average monthly Chinese PVC imports from Asia now total about
200000 tonne,' said a trader, adding that total imports this year
are estimated to be around 2.3-2.4m tonne.
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