Difference between US and Chinese PVC prices narrows in WCSA

The price difference between US and Chinese polyvinyl chloride decreased on the West Coast of South America in April. Despite this, market participants have pointed to competition with Asian offers as one of the main downward pressures on import prices in the region, whose main supplier is the US.

Considering an estimate that accounts for Chinese ethylene-based PVC export prices plus freight, US material prices have been higher in WCSA since March 31. This difference reached over $140/metric ton on April 15, but by April 22 it had already fallen to less than $90/mt.

Between April 16 and April 22, traders reported to Platts, part of S&P Global Energy, Chinese PVC offers in a range of $910-950/mt CFR WCSA.

Platts assessed PVC at $1,000/mt CFR WCSA on April 22, down $50 on the week, below the most competitive offer heard at $1,040/mt for US-origin PVC.

Challenges for Chinese PVC in WCSA

Despite lower prices, market participants say that buyers need a significant gap to switch from US PVC, widely known in the region, to Chinese material, whose transit time is longer.

"It's different for each buyer. It depends on their inventory and if they can wait longer for a Chinese product," a trader said.

Another point of doubt concerns the raw material of the resin, since China, in addition to ethylene-based PVC, also has carbide-based PVC, which is cheaper but usually has lower acceptance in Latin America, according to market feedback.

A second trader said that initially, there is a lack of clarity whether China's offers are for ethylene-based or carbide-based PVC, which adds more pressure to the market.

"Traders try to avoid the information because they know that many customers don't want this kind of PVC," the source said, adding that "they use this quotation to try to reduce US PVC prices. This is the strategy."

Although acceptance of Chinese PVC in WCSA is generally lower, competition with Asian material may pose an additional challenge for US resin, which faces antidumping duties in markets such as Mexico, Brazil, and Europe.

Platts assessed US PVC at $945/metric ton on April 22, down $30 week over week, below the most competitive offer corroborated at $950/mt, considering market feedback of lower demand.