Local PVC market in China drop further, bearish sentiment ahead

It is reported that domestic offers for both carbide and ethylene based PVC cargoes in domestic China market fell another CNY100-200/ton ($15-30/ton) this week as demand remains disappointed after the long holiday earlier this month. Two consecutive weeks of softening trend shy buyers away and many are expecting bearish condition in weeks ahead.

Latest offers for PVC in China stand at CNY6600-6700/ton ($852-865/ton without VAT) for carbide based and at CNY7000-7100/ton ($904-917/ton without VAT) for ethylene based, all based on EXW China, cash term.

A domestic producer said, “We are a bit concern about the near term market outlook as demand might diminish during winter season due to environmental restriction. We are watching out for the state of demand in India and Southeast Asia market, hoping to export some cargoes in the near term.”

At the moment, futures PVC contracts are traded at approximate CNY300-350/ton ($45-53/ton) below spot carbide based PVC, raising a risk that arbitrage traders might channel cargoes to spot ground to earn better margin, which could possibly press prices lower. “The soft trend in import ground is another pressure point and we think local suppliers might have to concede to additional discount in the coming week, hence we prefer to wait and see for now,” a buyer added.