Local carbide based PVC prices weakened in China

After almost three months of continuous rally, domestic PVC prices in China started to move south today on the effect of plunging futures trading. In fact, the most actively traded contract on Dalian Commodity Exchange for January delivery nosedived on the final trading day of the week, to hit the down-limits, settling at CNY390/ton ($57/ton) lower.

Things are not easy for spot market. Most producers insist on their offers claiming limited supply and persistent high production and transportation costs. Traders, however, are more open to negotiation. Several offers for carbide based PVC were reported at CNY200-300/ton ($29-44/ton) below official price list from producers.

A trader based in Eastern China open prices for carbide based PVC at CNY8000/ton ($992/ton without VAT), FD China, cash term said, “We are migrating our cargoes from futures to spot market today as prospect for futures trading remain bearish in the near term. Customers in spot market are very cautious, hoping to obtain more discounts. However, we think that tight availability from local producer might limit the extent of any price reduction.”

Market players are expecting December offers from major Taiwanese producer to be announced next week with increases. However, with the slow down of the construction sector ahead of freezing winter and the recent depreciation of the Chinese Yuan; any significant increment might not be accepted.

Local carbide based PVC currently traded at CNY8000-8300/ton ($992-1030/ton without VAT) while ethylene based PVC hold stable at CNY8400-8600/ton ($1042-1067/ton without VAT), all on EXW China term.