China PVC Powder Export Volume to Rise in Q3
Preface: China’s PVC powder export volume in Q2 dropped due to weakened foreign demand. Foreign buyers preferred to buy when the prices were going up instead of going down. In Q2, China’s PVC powder prices fluctuated downward, so Foreign buyers showed weak interest in purchasing. However, entering July, export orders improved as foreign buyers showed higher buying appetites. SCI reckons that China’s PVC powder export volume will rise in Q3.
PVC powder export volume in Q2 dropped notably.
The total export volume in Q2 was 433kt, down 35.15% from Q1 and 43.61% Y-O-Y. In April, the export volume saw a notable decline. The increment in export volume in May and June was limited. The monthly average export volume was around 140kt.
Underperformed demand in South and Southeast Asia.
From the perspective of export trading partners, export destinations in Q2, 2023 were still mainly concentrated in South Asia, Africa, Central Asia and Southeast Asia. At present, India is the largest export trading partner of China’s PVC powder. In the first quarter, China’s exports to India accounted for 57.38% of the total, but in the second quarter, exports to India accounted for only 38.26%. The drop in exports to India was the main reason for the obvious decline in exports in Q2. In addition, exports to Southeast Asia have also declined.
First, South and Southeast Asia entered the rainy season, dragging down the demand for PVC powder. Second, India mainly consumed previous inventory in Q2.
As China’s PVC powder prices moved down, foreign buyers showed weak interest in purchasing.
In Q2, China’s PVC powder market price fluctuated downward. Though increased unit maintenance dragged down the supply, PVC social inventory remained high amid weak demand. In addition, as foreign demand was in the doldrums, offers of PVC powder in the international market saw a constant drop in Q2. At the same time, China’s PVC powder export offers also dropped. Foreign buyers held cautious attitudes toward the PVC powder market.
PVC powder export volume in Q3 may increase amid higher foreign purchasing enthusiasm.
In July, China’s PVC powder export orders improved significantly. First, there were expectations for declined foreign supply. PVC units in the U.S. ran at low loads caused by tight feedstock, and some PVC units may undergo maintenance in August and September. Thus, it is expected that PVC powder export volume from the U.S. will fail to improve in Q3. Second, Formosa Plastics plans to shut down units for maintenance in August. Moreover, Formosa Plastics announced on July 18 the price of PVC powder cargo in August 2023. PVC powder export offers are $770/mt FOB Taiwan, $815/mt CIF China, and $820/mt CIF India. With the increment in export offers overpassing expectations and the supply declining, Foreign market players may show a higher interest in purchasing.
China’s export offers rose constantly backed by higher purchasing interest in the foreign market. Up to July 20, the offer of calcium carbide-based PVC powder was $745/mt FOB Tianjin, up $45/mt from early July. The offer of ethylene-based PVC powder is $20/mt higher than that of calcium carbide-based PVC powder. PVC powder export orders to be delivered rose to 210kt or so, up 70kt from early July.
On the whole, SCI reckons that China’s PVC powder export orders will move up in Q3 backed by high orders to be delivered, expectations for declined supply, and higher interest in purchasing.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
