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 this level.

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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