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China's PVC Prices Set for Downturn

Mon, 11/06/2006 - 6:36am

Chinese traders and sellers are saying China, the world's largest PVC producer, has become a victim of its own success as wild domestic price fluctuations, disparate pricing strategies, and a web-like distribution and trader network have eroded its selling power. Driven by Taiwanese producers, Asian PVC prices have dropped from above $1,000/metric ton CFR China in mid-September to below $800/metric ton, leaving Chinese producers and traders confused. Taiwan's Formosa Plastic's Co., which is seen as a market benchmark, attempted to push prices of its exports above $1,000/metric ton CFR China but failed, causing a sharp downward correction. "There are different pricing schemes and layers; every producer plays by its own rule. Such chaotic domestic PVC pricing systems easily destruct the market psychologically," said a Chinese ethylene-based PVC producer. Lack of effective marketing and pricing have resulted in a cut-throat price war.

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