Print

Over the past week, the monsoon brought heavy rain to Southern China, causing flood across the region. As a result, local municipal government has ordered temporary suspension of all train deliveries from Inner Mongolia and Xinjiang to Shanghai, Wuhan and Guangzhou, which affected the flow of material to the market.

Leverage on this issue, domestic sellers have lifted prices on their cargoes by CNY100-200/ton ($15-30/ton) compared to last week while it is reported that demand started to show some signs of improvement. A carbide-based PVC producer added, “Besides, most ethylene based makers are diverting their attention to India as demand in this market is much healthier. This has encouraged local buyers to source for some carbide-based cargoes to maintain stock level.”

Players are expecting this constraint supply condition to prolong in the near term as several plants are expected to adjust production rate during the G20 Summit though no specific guideline from government given. A producer in Ningbo commented, “We assume that we might need to operate at lower rate by end of August in compliance with government guideline despite we have yet to receive any official statement from the authority side. Both PVC plants in Tianjin area have been running at reduced rate for sometime now, hence we are not facing any sales pressure at the moment.”

Local prices in China is now reported at CNY5400-5600/ton ($690-715/ton without VAT) for carbide based PVC and at CNY5750-5900/ton ($735-750/ton without VAT), all based on EXW China, including VAT, cash term.