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China's PVC producers cut operating rates on poor margins

December 27/2011
(ICIS) -- Several Chinese polyvinyl chloride (PVC) producers have lowered their plant operating rates in the second half of December on shrinking margins, as caustic soda values are on a downtrend and feedstock calcium carbide prices remain high, an industry source said on Tuesday.

Prices of 32% membrane caustic soda in Jiangsu have fallen by yuan (CNY) 100/tonne (USD16/tonne) to around CNY860/tonne EXWH (ex-warehouse) from last week, according to data from Chemease, an ICIS service in China.

At the same time, domestic calcium carbide prices are at a high, reaching CNY3,400-3,500/tonne EXW (ex-works) in northwest China, Chemease data showed.
With decreased caustic soda profit and firm calcium carbide prices, we could hardly make a profit even when taking caustic soda profit into account. Thus, we have to cut PVC operating rates to a low level, a PVC producer in Inner Mongolia said in Mandarin.

Plants are running at low rates, barely enough to maintain the minimal operations needed to prevent pipes from freezing in cold weather, the source added.
Taking calcium carbide prices at CNY3,500/tonne, PVC production cost should be above CNY7,000/tonne. However, now we are selling PVC at around CNY6,200/tonne EXWH, said the producer.
Tags:PVC, liquid caustic soda, rigid caustic soda.
Category:General News
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