Asian PVC makers are increasingly diverting PVC cargoes away from China to markets such India and Southeast Asia due to sluggish demand in China and competition from cheaper domestic supply, market sources said Thursday.
"India and Southeast Asia are the top destinations for these PVC cargoes as demand there is firmer than in China. In addition, domestic PVC is trading at a discount," a Northeast Asia producer said.
A Southeast Asian source added: "There have been many cargoes heading to Southeast Asia this week. Even the Chinese producers are offering the material to the region now."
PVC demand has stagnated in China due to a slowdown in the Chinese property sector. But import prices have been on an uptrend for the past two months, pressured by improving sentiment in other global markets and limited feedstock vinyl chloride monomer availability.
At the same time, local PVC prices has been steady as sluggish demand prevents price gains in spite of higher feedstock costs, making domestic supply cheaper than imports.
Market sources are hoping that the move by China's central bank to cut the commercial banks' reserve requirement ratio by 0.5 percentage points to 20.5% from February 24 will boost PVC demand in coming months, as it released an estimated Yuan 400 billion ($63.5 billion) into China's economy.
