PVC price continues to drop on oversupply in China paste market

23 December 2011 11:13  [Source: ICIS news]

SHANGHAI (ICIS)--China’s PVC paste market prices have been the lowest of the entire year, industry sources said on Friday.

The delivery price of glove materials in East China is about yuan (CNY) 10,000/tonne ($1577) and the delivery price of leather materials in East China is about CNY9,500/tonne, lower by 25% and 30% respectively compared with the highest prices of 2011.

In supply, the upstream PVC paste plants face great pressure from overstocking because of poor sales in a weak market.

The total inventory of all large plants is more than 40,000 tonnes, taking up over 70% of stock capacity, according to data from ICIS China.

However, as they are still profitable, upstream producers are reluctant to cut operation rates to ease the inventory pressure, according to industry sources.

The demand for PVC paste is sluggish as the glove industry, which mostly relies on export, has difficulty with sales as it is badly affected by European debt crisis.

Product prices keep dropping due to sluggish demand and the fact that the leather and tool industries are in off season.

Some plants have shut down or turned to produce other products, according to industry sources.

The outlook for the PVC paste market is that it will remain in a situation of oversupply in the short term and the trend for prices is downward.

($1 = CNY6.33)

Additional writing by Xu Nuo

By: Sikee Shi

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