SEA players: Chinese PVC maker lifted prices to regional market

After a major Taiwanese producer rollover prices for June shipment earlier this week, several Chinese PVC producers has announced fresh offers with increases, pointing to firmer local ground and higher production costs, especially for carbide based material.

In fact, it appears that Chinese carbide based PVC offers below the $800/ton threshold are no longer available across Southeast Asia this week, players said. One of the factors encouraged Chinese producers to introduce price hike despite most others are maintaining offers is that domestic China market gain tremendous support over the pass week from surging futures market.

A carbide based PVC producer open new export offers at $800-810/ton FOB China, LC AS term, which is approximately converted into $820-830/ton CIF Southeast Asia, said, “We suffered severely from negative margin over the past month and we could not bear the loses amid rising production costs. Besides, local supply is tightening due to couple of maintenance shutdown going on. International buyers are not responding very positively to our offers, yet we plan to temporary maintain firm stance.”

Meanwhile, Chinese ethylene based PVC also inched $20/ton higher on an average reaching $850-860/ton CIF Southeast Asia, LC AS term. These cargoes are also facing similar resistance. An international trader offered to Vietnam said, “We have yet to be able to conclude any deal this week. Domestic materials are not much different from our offers, hence buyers show less favor to our cargoes.”

Malaysian buyers also reported receiving higher offers for Chinese material and several have stocked up sufficient inventories for the next one to two months from previous purchases. “We are unable to accept latest offers for Chinese materials, as ethylene based PVC from Southeast Asian market is relatively attractive at the moment,” a pipe maker said.

Southeast Asian players are very concern about the sustainability of this firming trend as market is entering slow season while upstream costs are weakening. Deals for Chinese material are expected at larger than usual discount this week since domestic market in China is loosing steam including futures trading.