North American PVC offers lower across the board

As North American producers have adjusted their export PVC offers down due to the persistent weakness of demand in global markets, lower offers from the region have started to be seen in several regions including Mediterranean and Asian markets. However, there is still limited buying interest as buyers are reluctant to commit to cargoes from long distances when the outlook generally remains bearish.

In Turkey, PVC k67 offers out of the US are reported $20-30/ton lower this week, breaking below a new threshold. A trader said, “We heard that there are some US PVC offers in the market at lower levels with a deferred payment term provided for one year. So we have decided to withdraw our offers.” Players generally comment that traders offering US materials are shying away from making large price cuts as they acknowledge that buying interest remains subdued and lower prices fail to pull buyers back to the market. However, some players argue, “Sellers are ready to give discounts in order to conclude deals.”

In the Egyptian market, where US materials are generally in a dominating position for imports, lower offers have also shown up from the region. This week’s range for US PVC suggests an approximate decrease of $10/ton at the high end and a larger decrease of $30/ton at the low end. As it is the case in the Turkish market, a buyer said, “Sellers of US materials do not want to sell below a certain threshold and therefore, they are planning to withdraw their offers.” Nevertheless, Egyptian buyers continue to expect further softening in import prices pointing to the bearish sentiment across the globe as well as lower feedstock costs.

Import PVC offers out of the US and Mexico were also revealed to Italy at lower levels last week. However, these prices failed to grab any buying interest as they stood on par with the low end of the overall local market, where promptly available cargoes are present. Thus, import Mexican offers have seen further downward revisions this week with a buyer concluding a deal for this origin at €85/ton lower levels than last week. He said, “Our pipe business is performing really badly amid the austerity measures of the Italian government. So we try to secure our needs finding the lowest price possible in the market.” Along with this done deal, Mexican PVC appears to have regained its competitive edge against local prices while US PVC offers are not repeated so far this week.

When coming to the Asian markets, North American PVC cargoes have shown up at lower levels as well. The US PVC k67 and k64 offers reported this week in India are standing $120/ton below the offers reported for the same origin in the first half of May. Nevertheless, a trader receiving offers from his US suppliers said, “The sentiment is very sluggish in the Indian market and buyers are not interested in import cargoes as the rupee continues to depreciate against the US dollar.” The depreciation of the local currency renders imports unfavorable for buyers as it costs more for them to trade in US dollars. A buyer also blamed the rising dollar for not showing interest in lower US offers and added, “We prefer to run down our existing stocks for the moment.”

In the Vietnamese market, a buyer also reported receiving lower US PVC k67 and k64 offers this week. Nevertheless, he said, “We are not interested in importing these days as our local supplier is providing us more competitive prices with flexible payment terms.”

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