VCM prices in Asia pressured by softer ethylene, sluggish PVC demand

Asian producers continue to maintain their initial March offers for VCM this week, although buyers have lowered buying bids in line with slackening PVC demand amid softer ethylene prices, as per Chemorbis. Initial March offers for VCM were announced at around US$880/ton CFR China, an increase of around US$40/ton from the February done deal level. The new offer levels were countered with buyer’s bids at around US$850/ton CFR China, citing sluggish demand in China’s domestic PVC market and falling feedstock costs. A month after the announcement of the initial March offers, spot VCM business remains unfinished in Asia, as producers refuse to relent from their initial offer levels while buyers lower intentions. Spot ethylene prices were notionally reported largely stable on a week over week basis, although trading activity was limited as buyers’ bids are considerably below sellers’ offer levels. Currently, spot ethylene prices on a CFR Northeast Asia are notionally being quoted at levels US$25/ton lower than the offers reported at the same time last month, while buyers’ bids stand US$50/ton or more below the notional price level. This decrease in ethylene prices has occurred despite crude oil prices rising to their highest levels in 2010 as PE demand fallen steeply in Asia, forcing PE sellers to reduce their prices to levels often below their theoretical break-even point in order to secure deals. Another factor encouraging buyers’ resistance in the spot VCM market is slackening PVC demand in the region. Major Asian producers report that they have sold over half their April PVC allocations to the Chinese market at prices ten dollars lower than March done deal levels, on poor demand from end-users in China though they have been forced to concede to lower prices to conclude deals despite their relatively limited monthly allocations for April. In Southeast Asia, import PVC deals for April are being concluded with even steeper discounts of US$15-30/ton from March offer levels, as Thai producers are rushing to sell their monthly allocations prior to the mid-April Thai New Year holidays, when monthly PVC consumption will be reduced in the region. PVC producers operating in Southeast Asia complain that their operating margins have been squeezed significantly this month as they have had to concede to lower prices in order to conclude deals while VCM feedstock costs have not moved lower to reflect the softening trend in PVC prices.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha
Reclamax single step plastic recycling machine

Reclamax single step plastic recycling machine