Abstract:

　　After following a mostly steady trend in June, domestic PVC prices started the month of July with price decreases. Ethylene and acetylene based PVC prices decreased by CNY140-150/ton ($21-22/ton) on average in the first week of the month, according to ChemOrbis Price Index. This week both markets have witnessed additional declines of CNY100-200/ton ($15-30/ton). Depressed demand is cited as the main reason behind the consecutive price decreases, with both regional producers and resellers conceding to price decreases in an attempt to promote their sales. The poor state of demand has forced many producers to trim their operating rates as they are having difficulty coping with their mounting inventory pressure, with producers also complaining of steep financial losses on their PVC business. Players in the region reported that most acetylene based PVC producers are currently running their plants at 30-70% while ethylene based PVC producers are working at around 40-70% of their full capacity. The decreases witnessed in the domestic PVC markets have occurred regardless of the fact that upstream carbide feedstock costs have remained persistently firm with theoretical production cost calculations based on current carbide prices suggesting that acetylene based PVC producers are already operating at prices below their cost level. However, acetylene based PVC producers are still willing to give discounts on their offers in order to liquidate their inventories, according to players in the region.