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Chinese players this week reported receiving new PVC offers from local producers with CNY200-400/ton ($30-60/ton) increased, as supply condition remains pretty tight. Ethylene based PVC hit above the CNY7500/ton threshold to trade at CNY7600/ton ($958/ton without VAT) while carbide based PVC ranging at CNY7300-7450/ton ($920-939/ton without VAT), all based on EXW China, cash term.

Most PVC plants are still operating at reduced rate on instruction from government to curb pollution, including two major ethylene based PVC makers Tianjin LG Bohai and Tianjin Dagu Chemical. “Sellers therefore are free from any sales pressure, which allowed price increases to take place in nearly eight consecutive weeks,” a market source said.

Several new PVC plants that were initially scheduled to come online within first half of 2017 have been now postponed, removing additional concern about the new supply.

However, buyers started to show resistance toward the latest offers as profit margins fell low after raw material prices rose approximate 20% since beginning of June. There were a small protest took place in Foshan last weekend, against further hike in raw material prices. A trader said, “It is the traditional high demand season, however converters are unable to transfer the cost to end product, leading to stiff resistance. We would continue to monitor further development, but carrying a feeling that the firming trend might slow down in the near term.”