China’s PVC Export Volume Declined in October
Preamble: China’s PVC powder export volume declined further in October 2022. China export arbitrage window in the PVC powder market stayed closed amid the weak USD market. Export orders decreased. It is expected that PVC export volume will inch down in November. A couple of imported cargoes may enter the Chinese market gradually.
China’s PVC powder export volume declined further M-O-M in October. According to GACC, PVC powder exports reached 96.6kt in October, down 11.9% M-O-M, and down 13.52% Y-O-Y. PVC powder exports totaled 1,755.6kt from January to October 2022, up 21.30% Y-O-Y. The arbitrage window stayed closed in the export market amid the weak USD market. PVC export orders were soft.
China’s PVC powder export areas mainly included South Asia, Southeast Asia, the Middle East, Central Asia, Africa, etc. in October. Specifically, India was still China’s largest export partner of PVC powder in October, mainly because India’s anti-dumping policy against China’s PVC powder export expired on February 19, 2022. After that, China enjoyed advantages in PVC powder export to India.
The main delivery places of PVC powder in China were coastal and frontier provinces in October, among which Shandong, Tianjin and Zhejiang were the main coastal delivery places, with total export volume of 75.9kt, accounting for 72.97% of the total. It was because most of the ethylene-based PVC powder producers were concentrated in these areas. Meanwhile, coastal places were convenient and had certain shipping advantages. Moreover, other provinces with more exports were Xinjiang and Inner Mongolia. Xinjiang and Inner Mongolia are the largest PVC powder production areas in China, with sufficient supply. Besides, Xinjiang enjoyed export advantages in exporting to the west, and the railway export from Inner Mongolia to Tianjin is also convenient. Total export volume in Inner Mongolia and Tianjin accounted for 16.55% in October, declining from September, mainly because in recent months, export orders of calcium carbide-based PVC powder significantly reduced.
China’s PVC powder export arbitrage window remained closed most of the time from Q3, reflecting that export orders went down. Calcium carbide-based PVC powder exports were sparse in particular. In addition, ethylene-based PVC export orders also diminished, even though some clients kept buying.
Participants are recommended to focus on whether the export arbitrage window will open in China. PVC powder units’ operating rate may be low because of load drop due to severe losses in profits. However, it is predicted that PVC powder supply will mount up, in line with some units going into trial production in late November. China domestic PVC demand will possibly show a downtrend in winter. SCI reckons that PVC powder prices will fluctuate downwards in December. Formosa Plastic Group issued the offer of PVC powder shipment cargoes for December 2022, with the offer reduced by $55-90/mt. USD prices are likely to move down further. It is expected that China’s PVC powder export arbitrage window will remain closed in the short run. A couple of low-priced imported cargoes are likely to enter the Chinese PVC market.
As a whole, it is expected that the export volume of PVC powder will continue to dip from November to December, in line with soft export orders and low pending delivery export orders. Export arbitrage window and overseas demand should be concerned.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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