Local PVC market continue to move lower in China

It is reported that local PVC offers in China this week continue to edge CNY100-200/ton (15-29/ton) lower for both ethylene and carbide based cargoes, as buying interest weakened following the recent dip in futures trading. Purchasing activities remain weak ahead of the National Day holiday, signalling a risk of further decline in the near term, players said.

Local offers currently stand at CNY7200-7400/ton ($937-963/ton without VAT) for carbide based PVC and at CNY8000/ton ($1040/ton without VAT) for ethylene based cargoes. “We are open to negotiation,” a trader said complaining disappointed sales result this week.

Supply for ethylene based PVC is reported to be tight with major producers remains operating at lower rate, which create a large price gap with carbide based cargoes. A producer added, “Spot market is still higher than futures trading at the moment, and arbitrage traders are leveraging the opportunity. We are not having high inventories on hand, yet still concern over the near term outlook.”

Trading activities in China might continue to diminish in the coming week as players are entering the holiday mood. A major Taiwanese producer has announced new import offers to China at unchanged level month on month, yet market is questioning the acceptability amid falling domestic prices.