04 May 2011 09:32 [Source: ICIS news]
By Amanda Zhang
The price of EVA type 5110J was CNY20,600-20,700/tonne ($3,169-3,184/tonne) EXW (ex-works) in south
The price of EVA type 7350M was $2,780/tonne on 28 March. It moved up $50/tonne on 29 March to $2,830/tonne CFR (cost & freight) CMP (
A supply crunch has exerted upward pressure on EVA prices since the third quarter of 2010 and widened the buy-sell gap.
The producer's inventories are not expected to build up until the middle of May because of the shutdown at its plant, industry sources said.
BASF-YPC held its price stable at CNY21,000/tonne EXW on 3 May, which it has been offering since 1 April, a company source said. The producer will not be lowering its offers as there is no pressure to clear stock levels in May, the source added.
Footwear, which is a major downstream sector, accounts for half of EVA consumption in
"We will have limited profits if we purchase feedstock EVA at the current high prices," a producer from the footwear industry said. However, despite purchasing less feedstock than the previous year, the offers of EVA producers have yet to slide, he added.
Besides downstream sectors such as footwear, EVA is used as a solar encapsulation resin in the manufacture of membranes in solar photovoltaic panels.
Downstream demand in the solar membrane sector has softened since the beginning of the year, but this is because of fewer export orders, industry sources said.
Some countries in the EU are planning to reduce their subsidies for solar photovoltaic plants.
The effects of Europe's subsidy cuts have spilled over to
This decline has led to downstream solar membrane factories – mainly those that are export-oriented – to lower their operating rates, resulting in a further drop in the purchase of EVA locally, sources said.
Should buying resistance continue in the downstream sector, inventories of the major producers will soon accumulate and heighten the likelihood of oversupply in June, market participants said.
As a result, signs of softening may only emerge then, they added, as producers will finally resort to lower their prices to move their stock levels.
EVA is derived from the copolymerisation of ethylene with vinyl acetate. It is a high polymer alloy known for its properties that include clarity, durability, flexibility and the ability to withstand low temperatures. EVA is used in a variety of applications such as stretch film for shrink wrapping, protector strips, shoe soles and disposable medical equipment.
Major EVA producers include BASF-YPC, Beijing Eastern Petrochemical and Beijing Huamei Polymer.
($1 = CNY6.50, $1 = €0.67)
Additional reporting by Amy Yan
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