SINGAPORE (ICIS)--Japanese and South Korean polyvinyl chloride (PVC) producers will likely follow the lead of their Thai and Taiwanese counterparts in hiking December prices amid strong demand and restricted supply of the material, industry sources said on Friday.
The northeast Asian producers were expected to announce their prices next week, sources said.
"We are certainly looking at an increase, but are still deciding on the extent of the hike," said a source at South Korea's Hanwha Chemical.
PVC spot prices in Asia were nearing eight-month high at $1,010/tonne CFR (cost and freight) China on 12 November, according to ICIS data.
Formosa Plastics, a major PVC producer in Taiwan, took the initiative to implement a $30/tonne (?2/tonne) price hike last week, raising December prices to $1,040/tonne CFR (cost and freight), said a company source.
"We have already closed our December consignment at the announced level," the source said.
Thai Plastics and Chemicals (TPC) seconded the move this week, nudging up its December offers into China by $20/tonne from November to $1,040/tonne CFR, said a company source.
Demand from the construction sector has been steadily improving in China in recent weeks, especially for ethylene-based PVC, causing prices to jump $20-30/tonne in the week ending 12 November, according to ICIS. PVC is a key product used in construction materials like pipes.
Tightening of supply on the back of mandated power cuts in China provided further support to the firming of PVC prices, industry sources said.
But carbide-based PVC prices in China appeared to be correcting after a strong rally last week, with values recorded at yuan (CNY) 8,800-8,900/tonne ($1,325-1,340/tonne) EXWH (ex warehouse) in eastern China, according to CBI China.
CBI China is partly owned by Reed Business Information, the parent firm of ICIS.
"After a big price hike of yuan (CNY) 300/tonne last week, we are seeing prices falling by CNY200/tonne this week," said a Japanese trader.
But for ethylene-based PVC, prices were steady in the Chinese domestic market at CNY8,800-9050/tonne EXWH, the trader said.
Strengthening of demand in the key Indian market also spelled gains for northeast Asian PVC exporters.
"Our export offers into India are at $1,010/tonne FOB (freight on board), while those into China and the Middle East are lower at $990/tonne FOB," said a Japanese PVC exporter.
The Indian PVC market was booming, as construction activity had picked up post-Diwali a festival observed on 5 November - and with the waning of the monsoon season - typically a lean season for PVC, said the Japanese trader.
"Prices in India are as high as $1,060/tonne CFR, compared with $1,030/tonne CFR in China," he said.
Exporting to Europe was not a viable option, said a PVC producer, citing that offers to that market could not go beyond $950/tonne FOB.
"PVC demand in Europe was weak due to the poor performance of the construction sector caused by a flagging economy, he added.
The northeast Asian producers were expected to announce their prices next week, sources said.
"We are certainly looking at an increase, but are still deciding on the extent of the hike," said a source at South Korea's Hanwha Chemical.
PVC spot prices in Asia were nearing eight-month high at $1,010/tonne CFR (cost and freight) China on 12 November, according to ICIS data.
Formosa Plastics, a major PVC producer in Taiwan, took the initiative to implement a $30/tonne (?2/tonne) price hike last week, raising December prices to $1,040/tonne CFR (cost and freight), said a company source.
"We have already closed our December consignment at the announced level," the source said.
Thai Plastics and Chemicals (TPC) seconded the move this week, nudging up its December offers into China by $20/tonne from November to $1,040/tonne CFR, said a company source.
Demand from the construction sector has been steadily improving in China in recent weeks, especially for ethylene-based PVC, causing prices to jump $20-30/tonne in the week ending 12 November, according to ICIS. PVC is a key product used in construction materials like pipes.
Tightening of supply on the back of mandated power cuts in China provided further support to the firming of PVC prices, industry sources said.
But carbide-based PVC prices in China appeared to be correcting after a strong rally last week, with values recorded at yuan (CNY) 8,800-8,900/tonne ($1,325-1,340/tonne) EXWH (ex warehouse) in eastern China, according to CBI China.
CBI China is partly owned by Reed Business Information, the parent firm of ICIS.
"After a big price hike of yuan (CNY) 300/tonne last week, we are seeing prices falling by CNY200/tonne this week," said a Japanese trader.
But for ethylene-based PVC, prices were steady in the Chinese domestic market at CNY8,800-9050/tonne EXWH, the trader said.
Strengthening of demand in the key Indian market also spelled gains for northeast Asian PVC exporters.
"Our export offers into India are at $1,010/tonne FOB (freight on board), while those into China and the Middle East are lower at $990/tonne FOB," said a Japanese PVC exporter.
The Indian PVC market was booming, as construction activity had picked up post-Diwali a festival observed on 5 November - and with the waning of the monsoon season - typically a lean season for PVC, said the Japanese trader.
"Prices in India are as high as $1,060/tonne CFR, compared with $1,030/tonne CFR in China," he said.
Exporting to Europe was not a viable option, said a PVC producer, citing that offers to that market could not go beyond $950/tonne FOB.
"PVC demand in Europe was weak due to the poor performance of the construction sector caused by a flagging economy, he added.
