U.S. imports making life tough for Chinese suppliersU.S. imports making life tough for Chinese suppliers

That all according to plastics pricing service ChemOrbis, which shared its recent update on China's PVC pricing situation. According to ChemOrbis, prices in China's PVC market have been stable to slightly higher in June even as prices in other major polymer markets have recorded steep month-over-month declines.

Although market participants in China are predicting continued steady PVC prices, this outlook is being challenged by softening prices for U.S.-made PVC in other global markets as well as reports of rising supply levels in Southeast Asia, which has been an important export destination for PVC from Chinese origins over the past month.
 
June import PVC business is around 80% concluded in China, reports ChemOrbis, with done deal levels for mainstream Asian origins $10-30/ton higher when compared with May done deal levels. Domestic PVC prices also remained largely stable during the past month, with prices for both acetylene- and ethylene-based PVC in the local market currently reported steady on the lower end of the range and CNY100/ton ($15/ton) lower on the upper end of the range, when compared with the same period of last month.  During the same period, import prices for HDPE film declined $50/ton on both ends of the range while import prices for homo-PP injection and raffia fell $110-120/ton.
 
Market participants in China who spoke with ChemOrbis pointed to limited import availability from major import PVC sources, along with firm VCM feedstock costs, as the main reasons for the relative strength of PVC prices when compared with other major polymer markets. PVC demand has also been said to be relatively strong inside China.

However, some participants are beginning to speculate that PVC prices in China might soon begin to move lower in accordance with the declining trends seen in other markets.  According to data obtained by ChemOrbis from the Chinese customs authorities, PVC from the U.S. accounted for 31.7% of all PVC imports to China in the first four months of 2011, making the U.S. the largest PVC exporter to China on a year-to-date basis. In Egypt import offers for U.S.-made PVC have declined by $49/ton on a CIF Alexandria, cash equivalent basis this week, with U.S. PVC prices to Egypt posting cumulative declines of $78-89/ton since the last week of May. The situation in Turkey is similar though the price declines have not been as steep.

Rising PVC supplies in Southeast Asia could also pose a challenge to sellers hoping to keep their prices to China firm in the coming weeks, as Southeast Asia has been a significant export destination for Chinese PVC over the past month. With oversupply on the horizon, Chinese PVC prices have fallen $45-50/ton within the region since the last week of May.