12 January 2009 12:20 [Source: ICIS news]
SINGAPORE (ICIS news)--Sellers were optimistic about the ethylene dichloride (EDC) market in Asia on an expected fall in imports from the US, traders and producers said on Monday.
“We are starting to see fewer deep-sea cargoes from the US Gulf Coast because chlor-alkali producers there have lowered their operating rates. This trend could continue until March or April,” a vinyls trader said.
According to the latest data released by the Chlorine Institute, ?xml:namespace>
Production was likely to remain reduced as caustic soda demand in the
Regulatory changes in
But market sentiment firmed after Chinese authorities installed temporary measures to help smooth trading, with traders reporting a sharp drop in deep-sea cargo arrivals, industry sources said.
Asia imports an average of 20,000 tonnes of EDC from the
The volume spiked to almost 80,000 tonnes in December. But this was due more to the desire of US producers to clear their inventories by year-end than an actual reflection of the monthly demand-and-supply fundamentals, traders said.
Another 40,000 tonnes of EDC imports are expected in January, but the volume could fall to as low as zero in February as chlor-alkali production rates in the
“We have already heard that there’s some difficulty in finding EDC cargoes for February loading. If the situation persists, the
The supply tightness would also come at a time when
Prices of downstream polyvinyl chloride (PVC) had been rising and EDC remained the most attractive feedstock to purchase and then convert to PVC, traders and producers said.
EDC is used to produce vinyl chloride monomer (VCM), which in turn is used to produce PVC. A more than $200/tonne-spread on EDC and VCM prices would make the former more attractive for PVC producers to purchase, traders and producers said.
The price of EDC in Asia was last Friday assessed at $130-140/tonne CFR (cost and freight) NE (northeast)
Other market players, however, said they were sceptical that the recent rise in PVC prices was sustainable, as demand destruction showed few signs of abating amid worsening economic woes.
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