29 April 2008 04:18 [Source: ICIS news]
SINGAPORE (ICIS news)--Japan’s largest vinyl chloride monomer (VCM) producer Tosoh Corp has settled its May cargoes at $960/tonne (€614.40/tonne) CFR (cost and freight) China, a company source said on Tuesday.
The settlement level was $40/tonne lower than its initial offer of $1,000/tonne but $70/tonne higher than April’s level of $890/tonne. The source attributed the price increase to rising feedstock costs and higher downstream polyvinyl chloride (PVC) values.
Spot prices of ethylene, among the key feedstocks in the VCM production process, had risen by almost $200/tonne on a CFR NE Asia basis in the past four weeks, according to global chemical market intelligence service ICIS pricing.
Despite the price hike, monthly settlement levels of VCM and PVC cargoes remained at more than $200/tonne apart. Taiwanese producer Formosa Corp’s benchmark offer for May PVC cargoes was at $1,170/tonne CFR China while Tosoh Corp subsidiary Taiyo Vinyl’s offer was at $1,200/tonne.
A $200/tonne spread between PVC and VCM prices is usually enough to attract buyers into the VCM market but concerns among buyers that that PVC prices might not remain at their current lofty levels for long had widened this spread in recent months, traders said.
($1 = €0.64)
For more on PVC and VCM visit ICIS chemical intelligence
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