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Plastics pricing: Tight supply keeps Asian PVC prices rising into May

The continuing affects of the Japanese earthquake have placed a damper on supply of polyvinyl chloride across Asia, meaning processors there can likely reckon with another round of price hikes as April turns to May. The price hikes come despite some drop in demand in China owing to the Chinese Central Bank's recent decision to raise reserve requirement rates.

This all according to plastics pricing service ChemOrbis (Istanbul, Turkey). According to the company, PVC prices in Asia have continued to move higher for May despite that slack demand out of China. Tight import PVC supplies across the region, rapidly rising domestic PVC prices in Southeast Asian markets as well as the $100/ton higher May sell proposals sought by Asian producers of PVC precursor vinyl chloride monomer (VCM) are said to be the main factors paving the way for new price hikes for next month.
 
Import availability to China and Southeast Asia has been squeezed due to the absence of both American and Japanese supply sources, which accounted for almost 60% of China's PVC imports from January to March. Following the massive March 11 earthquake in Japan, PVC producers in that country are yet to run their plants at their normal capacities, reports ChemOrbis. In fact, it reports, Japan has started to import PVC in order to cover its production losses, with U.S. PVC sellers diverting their cargoes to Japan in order to feed the demand there.
 
In China's import PVC market, where April business closed with $65-70/ton increases compared to March prices, May spot deals are settling at prices at or close to Asian sellers' initial levels following $30-85/ton hike requests over April done deals, with producers describing demand towards their new prices as "normal."

In Southeast Asia, PVC buyers increasingly have been eyeing import cargoes due to restricted domestic availability as a result of a VCM shortage and rapidly rising domestic prices. This week, import PVC prices to the region rose by $20/ton at both ends week-over-week. Sellers are predicting that PVC prices will remain firm over the coming month due to greater demand for import materials.

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