12 July 2012 07:19 [Source: ICIS news]
By Feliana Widjaja
SINGAPORE (ICIS)--Import prices of polyvinyl chloride (PVC) in China have started to move up this week as buyers replenish stocks, with major regional producer Formosa Plastics Corp (FPC) raising its August offers by $50/tonne (€41/tonne), market sources said Thursday.
But it remains to be seen whether there can be a robust recovery moving forward, they said.
Its August export offers to deep-sea markets, like the Middle East, were also increased by $50/tonne to $870/tonne FOB (free on board)
Spot PVC prices in Asia have stayed at the year’s low of $850-870/tonne CFR CMP for two weeks from 22 June, after shedding 18% within a span of two months because of sluggish demand in China and lacklustre re-exports market in the US and Europe. Prices were last seen at these levels in the first half of November 2011, according to ICIS.
Prices were deemed to have bottomed out for July shipments, as buyers that have delayed purchases for some time have started coming back into the market to replenish their lean inventory levels, market sources said.
Furthermore, prices of feedstock ethylene were on the rise and crude futures have largely rebounded, providing support to PVC values, market sources said.
“Crude oil and ethylene prices have gone up and customers are also thinking that now is the bottom price so they try to take in more cargoes,” a producer in northeast
But some participants in the PVC market doubt that product prices will stage a strong rebound as fundamental demand in
“Demand itself is still weak so prices may potentially come down again,” a China-based trader said.
Export orders for PVC end-users’ products remain low as the major re-export markets in the
Major PVC pipes and profiles producers were operating at 60% of capacity, while small/medium-sized downstream producers were running their plants at lower rates, market sources said.
The end-users’ market outlook remained bearish, with procurement of PVC raw material being done in small volumes to cover immediate needs, they said.
This sentiment is reflected in the cumulative import volume of suspension PVC in
This indicates that manufacturing activities continued to weaken, with a further slowdown expected in the next two months as external demand remains poor, analysts said.
“The economic outlook in
($1 = €0.82)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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