Cost Boosting Asia PVC Resin April Quotation Unexpectedly

Background: Due to weak market demand and the consideration of maintaining a strong cost side, major PVC resin production companies in Asia have postponed the release of pre-sale quotes for their March shipping schedules. The market has different opinions on future prices, and on March 19th, major PVC powder production companies raised their quotes by $10/ton compared to March, which exceeded market expectations.

Previously on:

Just after the Spring Festival, PVC powder in the Asian region welcomed a pre-sale quotation for March. Previously, due to the cost pressure brought by the continuous increase in ethylene, the price of PVC resin powder in the Asian region was ultimately raised by $30/ton in March. However, according to sales feedback afterwards, end customers were more resistant to the price increase, and major production enterprises did not meet their predetermined sales targets.

However, Chinese Mainland's export performance has experienced ups and downs. The FOB transaction price has fluctuated from rising to falling and from partial up, and finally the continuous export volume has been achieved in terms of price discounts. According to data statistics, in March, the main sample PVC production enterprises in Chinese Mainland signed more than 120000 tons of export orders.

In "Little Yangchun", the flowers have not yet bloomed

In the early spring of March, the industry accelerated its recovery, and the operating load of downstream PVC resin product enterprises in China increased to around 50%. However, due to the drag of the global economy and domestic real estate, infrastructure and other industries, the year-on-year decrease was still more than 10%. Domestic demand was mainly in demand, and the inventory of PVC resin powder industry maintained a pace of accumulation. Data shows that the inventory of PVC powder production enterprises and social samples was nearly 9 percentage points higher than last year.

Preliminary estimates indicate that the domestic PVC resin production in March will rebound to 1.963 million tons, with an increasing trend compared to the previous month. Based on the above demand performance, the contradiction between the supply and demand structure of the market fundamentals is more prominent. Although with the improvement of demand expectations, the domestic PVC resin powder market in March will still fluctuate within the range of 5600-5800 yuan/ton of spot goods in East China.

In terms of the international market, at the beginning of the overhaul of the production enterprises in Northeast Asia, although PetroChina in Taiwan, China, China, had a fire in the ethylene pipeline in the middle of March, the comprehensive market assessment had little impact on the supply of PVC resin around. In addition, the market supply in Chinese Mainland was sufficient, and the supply of polychloroethylene powder in Asia increased steadily. From a demand perspective, the Southeast Asian Ramadan holiday has had a slight impact on demand, with normal delivery in India in March, and the arrival of April Ramadan and the off-season of the future monsoon season. The market's stocking mentality is not good, and the market believes that the Indian election may also cause a slowdown in import market demand.

The pre-sale price for PVC resin in the Asian region in April was generally believed to be stable based on the current fundamentals in the market. Some market participants believed that sales were poor in the early stage, and companies should slightly reduce their sales by about $10/ton as the cost of ethylene decreases; However, major PVC production companies in Asia have postponed their original quotation in mid March and announced on Tuesday that their pre-sale prices for April will increase by $10/ton compared to March, which was unexpected in the market. The main reasons given are current production cost pressures and confidence in market demand expectations.

However, from market feedback, it can be seen that after the April quotation of major PVC resin production companies in Asia was released, market feedback was generally poor, and the sales target of price increase was far from achieved. There was no news of high prices updating the Indian market and signing orders; Taiwan, China of China increased by $10/ton, Japan and South Korea and other regions increased by $10/ton. However, considering the advantages of tariffs in Japan and South Korea, the space for Chinese Mainland to increase its export price is very insufficient. Most PVC FOB prices produced by ethylene method remain firm, while PVC FOB prices quoted by calcium carbide method recovered at a low price. The trading volume was slightly better than last week stimulated by the increase in external prices.