China PVC Powder Export Volume Rose After Chinese New Year
Preface: China’s PVC powder exports rose after the Chinese New Year holiday. As Formosa Plastics raised offers, China’s calcium carbide-based PVC powder producers received more export orders amid price advantages. However, after foreign buyers’ stockpiling, China’s PVC powder export volume may fail to rise further.
China’s PVC powder export volume increased after the holiday, supporting the market to some extent.
China’s PVC futures prices moved down after the holiday, denting market players’ sentiments. At the same time, the recovery of downstream demand was delayed. Thus, PVC powder spot prices moved down. China’s domestic market transactions were soft. However, the export market was active, supporting the market to some extent.
On February 19, foreign buyers showed higher interest in the inquiry. On February 20, Formosa Plastics raised March PVC powder cargo offers by $30/mt (FOB Taiwan: $750/mt, CIF China: $795/mt, CIF India: $820/mt). China’s export prices of ethylene-based PVC powder rose by $20-30/mt. China’s ethylene-based PVC powder export offers hover at $730-760/mt, while calcium carbide-based PVC powder export offers hovered at $705-715/mt. The price spread between ethylene-based resources and calcium carbide-based resources enlarged. India buyers mainly purchased calcium carbide-based PVC powder, whose prices were low. On February 20, over 40,000kt PVC powder resources were purchased by foreign buyers. Increased export orders boosted market players’ sentiments.
Foreign buyers engaged in bargain-hunting.
PVC powder export flows were concentrated in India. First, the foreign market had rigid demand. Second, China’s calcium carbide-based PVC powder prices were relatively low.
Foreign rigid demand was stable. After the holiday, market transactions recovered gradually. Most foreign buyers showed higher enthusiasm for the inquiry but held watch-and-see sentiments before Formosa Plastics announced its export offers.
Calcium carbide-based resources enjoyed higher cost-effectiveness. On February 20, the average export dealing price of calcium carbide-based PVC powder hovered at $705-$715/mt FOB Tianjin. The freight to India is around $40/mt. The average price of China’s calcium carbide resources to Indian ports was $750-755/mt. Formosa Plastics raised March PVC powder cargo offers by $30/mt (CIF India: $820/mt). The spread price was $65-$70/mt. Normally, China’s calcium carbide-based PVC powder export prices are $20-30/mt lower than Formosa Plastics, which can be traded. Once the price spread exceeds $50/mt, there will be a large number of buyers choosing calcium carbide-based PVC powder.
Formosa Plastics’ export offer and speculative demand from the foreign market should be noticed.
There is still uncertainty about whether China’s export orders can be sustained in the later period. First, As several producers raised export offers to $717/mt, foreign buyers’ purchasing enthusiasm decreased. Second, after stockpiling, some rigid demand has been largely replenished. Third, tepid transactions at Formosa Plastics have been heard, so Formosa Plastics may cut offers to promote sales in the later period. Foreign buyers’ replenishing enthusiasm may decrease. There will possibly be some export orders, but the export volume may fail to rise further.
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