PVC spot prices hit an inverted V-shaped curve from mid-August to late December in the carbide-based and ethylene-based PVC markets. However, from end-December onwards, ethylene-based PVC prices increased steadily until end-February, while carbide-based PVC fluctuated slightly in the same period.
From mid-August to end-February, carbide-based PVC prices in east China were at yuan (CNY) 6,350-6,500/tonne, but hit a high of CNY6,685/tonne in mid-September. Prices of ethylene-based PVC fluctuated at CNY6,775-7175/tonne in the same region.
While domestic prices soared because PVC demand traditionally peaks during the September-October period, it also received a large boost when demand rose after the US stimulated the economy with its quantitative easing (QE3). However, the upward price trend was short-lived, as downstream buyers remained cautious and kept their inventory levels lean.
From November onwards, as the PVC downstream sector experienced its seasonal lull, factories responded by running at low rates to keep limited yield.
However, the total capacity in the market increased on the back of several new carbide-based PVC plant start-ups. The rapid increase of monthly PVC output led prices to decline, before stabilising from end-2012 onwards.
In early 2013, production was limited by the tightening supply of VCM, which is the raw material for ethylene-base PVC. As a result, PVC prices started rising gradually.
On the whole, the PVC sector did not perform up to market expectations, with many participants cautious in their restocking activity. Price fluctuations were limited, because overall trade was subdued.
Updated to mid-February 2013