Tight supply steers local PVC market north in China

After a brief stabilization observed over the past two weeks, domestic producers in China continue to lift PVC prices claiming worsened supply crunch condition. Latest offers for both ethylene and carbide based PVC showed CNY300-400/ton increased week on week. 

Market resistance is building high as converters are facing tough time transferring the costs to end products, leading to a general slow down in purchasing activities. In contrast, sellers show no intention to decelerate the current firming trend, especially when both Oxy Vinyl and Formosa Plastic Corp in the USA have declared force majeure after a tropical cyclone swept through the state of Texas, leaving USA's largest petrochemical site with heavy flood. Both plants produce 935,000 tons/year and 625,000 tons/year respectively.

An ethylene based PVC maker commented, “Our current offer level in local China is as high as CNY8200/ton ($1072/ton excluding VAT), EXW basis, though there are resistances from buyers, we are still holding firm stance on our offers due to low inventory pressure at the moment.”  Another trader added, "The thing is we only can sell small quantity these few days and demand might become frail again if additional price hikes are introduced in the near term."

Local carbide based PVC prices in China currently stand at CNY7700-7800/ton ($1006-1019/ton excluding VAT), and ethylene based PVC at CNY8200/ton ($1072/ton excluding VAT), both at a EXW China basis.