The CFR China PVC price benchmark rose $10/mt week on week to hit a five-month high of $945/mt on Wednesday, fueled by a US supply crunch after Harvey forced the shutdown of a few PVC plants, market sources said Thursday.
The price was last higher at $950/mt, on March 22, according to S&P Global Platts data.
For monthly PVC negotiations in Asia, market sources said Asian PVC producers would start offering at more than $1,000/mt CFR China for October.
For September, PVC producers sold at around $940/mt CFR China, $50/mt higher than in August.
The Asian PVC producers are to reveal their fresh offers for October in the third week of September.
This week in the global spot PVC market, producers stopped offering cargoes amid US supply crunch concerns, after Hurricane Harvey -- which is now a tropical storm -- forced the shutdown of a few PVC plants.
Formosa Plastics on Tuesday had declared force majeure on chlor-alkali and specialty PVC products produced at its Point Comfort, Texas, petrochemical complex, citing the fallout from Harvey, according to a letter to customers obtained by Platts.
While the complex -- which was shut prior to the storm making landfall -- it did not sustain major damage, based on initial reports, but severe flooding along the Texas Gulf Coast has impeded the company's ability to restart, the letter said.
"Even though there is no damage at PVC production facilities in the US, it would be difficult to ship PVC for the time being as it will take some time to restore logistics," a market source said. The source estimated that US PVC cargoes would not be available in the market until the end of September.
PVC supplies from Asian producers are also limited due to plant turnarounds. There were some offers from the Middle East and Europe to India last week, but such offers would likely stop amid the looming supply crunch globally, according to market sources.
"Supply quantity from the Middle East or Europe to Asia is limited. It is not able to cover the supply shortfall from the US," another market source said.
The US is one of the key PVC suppliers to Asia.
According to the latest data by the Chinese customs department, PVC imports from the US to China amounted at 13,796 mt in July, accounting for around 26% of the total import volume of 53,069 mt. The largest PVC exporter to China is Taiwan, with the volume at 22,364 mt in July, or 42% of the total.
