Chinese players: PVC demand is set to head north

Similar to other materials, post-holiday demand for PVC in China is rather disappointed, which caused an approximate increased in domestic inventories by 10 per cent week on week and sent prices lower. However, this condition is not expected to be long lasting given the fact that overseas supply is tightening while demand shall revive soon enough on the back of government effort to rebuild rural toilet system.

At the moment, domestic materials are traded in the range CNY7200-7300/ton ($971-984/t without VAT) for ethylene based PVC and at CNY6500-6650/ton ($876-896/t without VAT) for carbide based PVC, all based on EXW China, cash equivalent.

A trader continues offering CNY50-100/ton ($8-15/ton) discount on both grades this week said, “Sentiment is a little sluggish due to soft futures trading. Many of our customers are yet to achieve regular operation rate due to lacking manpower. However, near term outlook seems positive.”

Local producers are expressing relatively optimistic view regarding the market condition in the coming week. “Major Taiwanese makers might implement $20-30/ton increased on April shipment and that’s a boost to the regional market. Besides, the Chinese government is very serious about rebuilding the whole rural toilet system, which might be very promising to the pipe industry,” an ethylene based PVC producer added.