China's PVC market surged second time in a week, demand seems picking up

Domestic PVC market in China is amid an interesting development as real demand remains mediocre, yet prices have surged for the second time this week. Compared to last week, carbide based PVC juped up to CNY250/ton ($38/ton) and ethylene based PVC gained CNY100-150/ton ($15-23/ton).

At the time this report is published, local offers stand at CNY6300-6400/ton ($816-829/ton without VAT) for carbide based PVC and at CNY6800-7050/ton ($881-913/ton without VAT), all based on EXW China, cash equivalent.

Arbitrage traders are especially active in the spot ground after continuous firming futures market. “We have sold out all December delivery cargoes and currently pre-selling for January delivery parcels. Converters are not very eager to make large buy ahead of the traditional low demand season, yet traders are very aggressive,” a producer said.

With an unexpected quick recover in local demand, Chinese suppliers might have less allocation for export in the coming days. Another producer added, “We have pre-sold cargoes for early February delivery in local market. We only have a small quantity remaining for overseas customers and we plan to implement a small hike from the previous month.”