February import PVC prices to Asia move higher

09-Jan-14

Import PVC prices for February were announced with increases in Asia as strong feedstock markets, limited VCM supply and speculation that American producers may reduce their export allocations to Asia all pushed sellers to seek higher prices, as per ChemOrbis. Spot ethylene prices on a CFR Northeast Asia basis have rallied to reach their highest levels since 2008 while spot VCM prices have climbed to their highest level since March 2013. A source at a Taiwanese PVC producer said, “We believe that ethylene supply will remain low throughout the first quarter due to a number of cracker turnarounds in Japan and this is likely to keep spot ethylene prices high.” A trader reported to have received February prices from a major Taiwanese producer with US$20-30/ton increases from January at a level matching the sell ideas expressed by the producer last week. “Our supplier informed us that they are unwilling to give any discounts on their prices as spot ethylene prices are strong while VCM availability is tight,” the trader reported. A trader based in China commented that they have not received fresh offers from their American suppliers yet, adding that their suppliers have indicated that they will reduce their export allocations in the coming month owing to better demand from their domestic market. “Our supplier suggested that they will lift their February prices to match the new offers for Asian origins,” the trader stated. According to ChemOrbis, a South Korean producer expressed February sell ideas with US$20/ton increases while adding that they have not announced their new prices yet. “We plan to raise our offers to match other Asian suppliers’ prices, although we expect to face some resistance at our new prices. We are not facing any difficulties obtaining VCM supplies, but we have heard that other producers are experiencing VCM shortages and we believe that this will encourage them to remain firm on their hike targets,” a producer source stated. An Indonesian producer who reported concluding their January shipment export deals commented, “We are planning to raise our prices for February to keep pace with the recent increases in spot ethylene prices. We expect to see good demand from our local market as the government will be looking to inject some money into the economy before the upcoming elections.”