Risk of downtrend? Chinese PVC makers think they have solutions

As deep seas cargoes from the USA are pouring in at competitive prices while domestic demand is waning ahead of the traditional slow demand season, the risk of a weakening trend is mounting. Earlier this week, major Chinese PVC producers meet in the PVC Northwest United Body conference and agreed on a pricing framework in an effort to minimize heavy speculation that could drive market out of order.

The pricing framework is set for six months as shown in the following table:

Would this really help the market? At the moment, the impact is minimal.

This week local carbide based PVC continue to move lower by CNY50-100/ton ($7-15/ton) while ethylene based PVC slashed CNY200/ton ($29/ton) on falling futures prices and soft buying interest.

A market participant, who attended the conference said, “Producers have not worked out on measures in the event market run out of the pre-set range. Therefore, we think trend would still depend on supply-demand fundamental.”