20 July 2011 08:50 [Source: ICIS news]
By Feliana Widjaja?xml:namespace>
Spot prices of PVC reached their peak at $1,220-1,250/tonne (€866-888/tonne) CFR (cost & freight) CMP (China Main Port) in May
Prices in the spot market have plunged to the current level amid sluggish demand in
Power restrictions in several regions in east
As a result, some market participants do not expect to see a significant improvement in demand until September.
In addition, a deluge of competitively priced
“We have no choice but to reduce our prices in order to compete with the cheap
The country’s high interest rates and its tightened monetary policy also continue to weigh heavily on buying sentiment.
“The tight monetary policy is restricting buyers’ cash flow and as a result they are not in a position to buy,” a trader said.
This is the third time in the year that the country has raised interest rates in its bid to curb inflation.
Opinions are mixed on when the PVC market will emerge from its current slump.
End-users are adopting a cautious stance amid the uncertainties in crude oil price direction, the weak
On 20 July, Taiwan's Formosa Plastics announced its benchmark PVC offer for August into
The sharp rebound in polyethylene (PE) and polypropylene (PP) prices in
“[Prices in the] PVC market usually lag behind the PE and PP market by around two weeks. Since [the prices of] PE and PP have rebounded, it’s a matter of time before PVC follows suit,” a producer based in southeast Asia said.
Several market players are projecting a recovery in PVC prices in August as they feel that seasonal demand will set in sooner or later.
“The traditional peak [production] season from July to September seems to be delayed this year but buyers will have to purchase PVC eventually,” a trader in northeast Asia said. These downstream factories have to procure August or September cargoes to manufacture finished goods for re-export to the
Meanwhile, the supply of PVC in
However, export volume from the country still remains limited as local producers are focusing on supplying Japan's domestic market.
Still on the export front, producers in
Export prices were last assessed by ICIS at $1,080-1,090/tonne FOB (free on board) CMP for carbide-based PVC on 15 July, while ethylene-based PVC prices were at $1,100-1,120/tonne FOB CMP on the same date.
In contrast, spot prices of carbide-based and ethylene-based PVC in east
“This is not a good time to export, we have stopped exporting since June,” a producer in
($1 = €0.71, CNY6.46)
For more on PVC, visit ICIS chemical intelligence
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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