Due to high raw material costs, the Asian PVC market will maintain a strong trend despite the seasonal demand downturn at the beginning of the year. This is a judgment made by market players over the weekend. In the past two months, although demand in the Chinese market has been weakened by the winter, Asian PVC prices have still risen by 7.6% to US$900-$940/tonne (cost and freight, the main port of China).
Market participants pointed out that the key to the profitability of ethylene-based PVC is the price of ethylene. In the past few months, the main reason for the rise in PVC prices was the rise in ethylene prices. Regardless of whether the price of crude oil falls or not, ethylene prices have remained high. At the end of December last year, due to tight supply and strong downstream demand, ethylene prices in Northeast Asia hit a 15-month high, reaching US$1160-$1200/ton (cost plus freight, Northeast Asia, the same below); the price of dichloroethane rose. To 450 ~ 480 US dollars / ton; vinyl chloride manufacturers quoted in January this year, the price of 800 US dollars / ton, and a month ago, the price is only 720 to 730 US dollars / ton.
Market participants said that this trend will continue. Due to the continuous supply shortage and the planned overhaul of a number of crackers in Asia, Asian ethylene spot prices will continue to record highs in 2010. An Asian PVC manufacturer stated that because of the high cost, PVC producers have no choice unless they increase prices or cut down the operating rate of the equipment. However, the manufacturer admitted that the price increase may be limited because demand will continue to be weak until February. At the end of last year, due to the financial turmoil, the price of crude oil and ethylene fell to lows over the years, making ethylene-based PVC more cost-effective than calcium carbide-based polyvinyl chloride. It is reported that more than 70% of Chinese PVC manufacturers use calcium carbide as raw materials, while Northeast Asian producers use ethylene as raw materials.
Although China has the world's largest PVC production capacity, due to the drop in ethylene prices, the import volume of ethylene-based polyvinyl chloride (PVC) hit a new record in 2009. On the other hand, the Chinese PVC market has always been in a low operating rate. In the first half of 2009, China imported about 1.2 million tons of polyvinyl chloride, which is more than one million tons imported in 2008. With ethylene prices skyrocketing, China's calcium carbide production of PVC competitive advantage has emerged. In the second half of 2009, the import volume of PVC in China steadily decreased. According to China Customs data, the import volume in November was only 60,646 tons.
Market participants pointed out that the key to the profitability of ethylene-based PVC is the price of ethylene. In the past few months, the main reason for the rise in PVC prices was the rise in ethylene prices. Regardless of whether the price of crude oil falls or not, ethylene prices have remained high. At the end of December last year, due to tight supply and strong downstream demand, ethylene prices in Northeast Asia hit a 15-month high, reaching US$1160-$1200/ton (cost plus freight, Northeast Asia, the same below); the price of dichloroethane rose. To 450 ~ 480 US dollars / ton; vinyl chloride manufacturers quoted in January this year, the price of 800 US dollars / ton, and a month ago, the price is only 720 to 730 US dollars / ton.
Market participants said that this trend will continue. Due to the continuous supply shortage and the planned overhaul of a number of crackers in Asia, Asian ethylene spot prices will continue to record highs in 2010. An Asian PVC manufacturer stated that because of the high cost, PVC producers have no choice unless they increase prices or cut down the operating rate of the equipment. However, the manufacturer admitted that the price increase may be limited because demand will continue to be weak until February. At the end of last year, due to the financial turmoil, the price of crude oil and ethylene fell to lows over the years, making ethylene-based PVC more cost-effective than calcium carbide-based polyvinyl chloride. It is reported that more than 70% of Chinese PVC manufacturers use calcium carbide as raw materials, while Northeast Asian producers use ethylene as raw materials.
Although China has the world's largest PVC production capacity, due to the drop in ethylene prices, the import volume of ethylene-based polyvinyl chloride (PVC) hit a new record in 2009. On the other hand, the Chinese PVC market has always been in a low operating rate. In the first half of 2009, China imported about 1.2 million tons of polyvinyl chloride, which is more than one million tons imported in 2008. With ethylene prices skyrocketing, China's calcium carbide production of PVC competitive advantage has emerged. In the second half of 2009, the import volume of PVC in China steadily decreased. According to China Customs data, the import volume in November was only 60,646 tons.
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