June 23, 2021 (MLN): PVC-Ethylene margins have increased by 4% WoW or US$38/ton, reaching around US$940/ton from US$902/ton in the international market.
The increase in margins is attributable to an 8% WoW decline in Ethylene prices (raw material for PVC), currently hovering at US$840/ton.
Despite rising upstream costs, Ethylene prices fell mainly due to the fact that the majority of plants in China have started their operations which lead to ample supply of ethylene thus widening the PVC-Ethylene margins, a report by Darson Securities cited.
On monthly basis, Ethylene price showed a significant decline of 14% from $975/ton to $840/ton, mainly due to supply glut from China, the USA, and Europe.
Meanwhile, PVC prices remained within range-bound at $1,360/ton, showing a slight 2% decline on a MoM basis. This was primarily due to improved demand from India amid easing the Covid-19 lockdown.
So far, the average PVC-Ethylene margins for the ongoing quarter are still on the higher side, up by 19% to around US$1,002/ton from an average of US$839 in the preceding quarter.
For CY21, the PVC-Ethylene spreads are expected to average around $600/ton, and further, they are likely to normalize in CY22, the report said.
