15 May 2009 08:14 [Source: ICIS news]
SEOUL (ICIS news)--The price rally in China’s polyvinyl chloride (PVC) import market could be losing steam due to a decline in domestic PVC values, traders and producers said on Friday.
May-delivery imports to China had been sold at around $730/tonne (€533/tonne) CFR (cost and freight) China Main port (CMP), a $70/tonne increase from the previous month. But market sources said they believed it was unlikely for producers to achieve a similar hike for June shipments.
"PVC prices in the Chinese domestic market had declined from yuan (CNY) mid-6,000s/tonne ($880/tonne) EXWH (ex-warehouse) to the low-CNY6,000s EXWH range. Chinese buyers would want to see a similar decline for import prices," a source said on the sidelines of the Asia Petrochemical Industry Conference (APIC) in Seoul.
Benchmark June offers were yet to be released but there was speculation that producers might start offers at $750-760/tonne CFR CMP. However, the declining domestic prices could mean that Chinese PVC buyers were only wiling to accept a rollover price of $730/tonne CFR CMP, market sources said.
A massive import influx in the first quarter of the year and slow economic conditions might have resulted in relatively high inventory levels and dampened Chinese buying interest, traders and producers said.
Most PVC producers said they believed this sentiment would be temporary and were optimistic that the massive economic stimulus measures rolled out by the Chinese government would buoy real demand over the next three years.
One producer also noted that while demand in the Chinese domestic market seemed to be waning slightly, buying interest in the re-export sector remained firm enough to support another round of price increase.
($1 = €0.73/ $1 = CNY6.82)
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