New September import PVC prices surface higher in China on supply constraints

New PVC prices started to be revealed with increases in China’s import market this week supported by approaching maintenance shutdowns at several producers in Asia and the US, according to ChemOrbis. Although expectations for reduced supplies in these regions give an upper hand to sellers for their increase intentions, buyers have shown strong resistance to these hike proposals so far and adopted a wait and watch stance to watch for any adjustments later. A Taiwanese PVC producer asked for US$30-40/ton hikes for September over their last August deals in China. A source at the producer blamed their reduced supplies to their shutdown in September and firm local prices inside China for their increase request. "We still need time to see the response from buyers as we just issued our new offers. We are refusing to concede to August deal levels for now. We believe that buyers will finally accept prices close to our new offers," he noted. The producer had tried to obtain the same amount of increases before conceding to rollovers for August. A trader who received new offers from the producer noted, “Their new announcements are above our expectations. We plan to wait and see the market response before making any purchases as the hike figure is beyond buyers' forecasts and may face resistance over the near term.” He is not sure about whether the producer will step back from their offers if buyers resist as strongly as they did in August. In the latter part of the week, he reported receiving a price US$10/ton below initial September prices, saying, “We plan to purchase material to satisfy our customers’ needs owing to limited supply.” A second trader also said, “We hear that responses are not encouraging as the producer only received very few orders following their hike announcement. We are informed that the producer allocated a limited export quota for September shipments compared to normal due to their turnaround in September.” The trader also received a smaller allocation from the producer but he did not make any purchasing decision yet as he is still waiting for further price adjustments. “We will wait a bit as buyers’ resistance will create pressure on producers,” he noted. A sheet and film manufacturer lamented, “We can’t accept such high prices. The producer’s new prices will be unworkable if buyers don’t buy.” A trader who received new Taiwanese and American k67 offers with US$10-20/ton and US$20-30/ton increases, respectively, commented, “We will not source large volumes over the short term based on the fact that producers' hikes are receiving strong resistance for now and prices will not see further hikes over the near term. Hence, we will wait and see market movements in the coming days although our suppliers refused buy ideas below their offers given their tight supplies.” A film converter received Taiwanese and US offers, saying that that they are not confident about the market and elect not to engage in fresh purchases for now in a bid to reduce risks. Plus, their business is not performing actively. Regarding supply, a Taiwanese producer is set to implement a maintenance shutdown at their VCM, EDC and caustic soda plants in Mailiao in mid-September. Their VCM plant, which has a production capacity of 800,000 tpa, will be off-line for a month while the company’s 1.1 mln tpa EDC plant will be under maintenance for two weeks. A second Taiwanese company will shut its VCM plant in Kaohsiung on August 20 for a 15 day turnaround. The plant is able to produce 382,000 tpa of VCM. Apart from these, the region is set for other shutdowns in Japan, China, Indonesia and South Korea during the period between August and October. Two PVC makers in the US will also bring their PVC plants off-line in September and October, according to ChemOrbis. According to industry sources, Shintech is mulling over a planned maintenance at their PVC/VCM complex in Plaquemine, Louisiana which may start in late September. OxyVinyls will reportedly shut their PVC/VCM complex in Houston, Texas in late October. The plant produces 950,000 tpa PVC.