A tug-of-war unfolds in Türkiye as PVC demand struggles against rising costs

The import PVC market has seen some price hike attempts in February as rising costs have squeezed sellers’ margins and prompted firmer selling intentions from traders. However, demand remained subdued, and buyer resistance has put pressure on offers at the upper end of the market. In recent days, attention has shifted to new price announcements from Europe to Türkiye, following a notable increase in ethylene contract prices. Meanwhile, local distributors appear open to minor discounts to stimulate deals.

According to the weekly average data from ChemOrbis, PVC sellers attempted price hikes a couple of times in Q4 2024 to recoup their margin losses in Türkiye. Despite tighter prompt supply, these attempts failed due to lagging demand conditions.

Lower bids weigh on US PVC   

In the dutiable market, the overall PVC K67 range saw marginal gains on a weekly basis, driven by firmer attempts from US producers. Hike intentions stemmed from elevated upstream costs and temporary shutdowns due to harsh weather conditions, which pushed FAS Houston prices higher over the past week. Some players also attributed rising sell ideas to optimism about the domestic demand outlook amid potential projects following wildfires in California. This optimism contrasted with the lingering uncertainties regarding financial markets and global trade flows amid Trump’s tariff actions.

A Turkish profile manufacturer commented, “US K67 prices around $780/ton CIF Türkiye are not workable as we can obtain better prices for other origins. We have heard a few prices as low as $725/ton CIF while they may be for short sales.”

Another factor behind the lethargic demand was buyers’ projections of competitive Chinese and South Korean offers as the month progressed, particularly if ocean container prices declined further. Meanwhile, Russian K67 reappeared after a long absence at $800/ton CIF, subject to a 6.5% duty, although this was not confirmed by the broader market at the time of writing.

Demand unfazed by rising European C2 for now

The bullish outcome of February ethylene contracts, which was already anticipated, fueled stronger expectations for new European PVC offers among traders. Meanwhile, demand for imports remained in the doldrums due to financial challenges and the off-season in derivative segments, which kept buyers from rushing to replenish stocks.

Prior to the ethylene contracts, sources from European PVC makers expressed their willingness to raise offers, citing squeezed margins. However, they also voiced a lack of confidence in demand and did not rule out the possibility of rollovers on transactions, particularly in the case of firm counter bids from large customers.

Players look for clues from global PVC markets

The market may continue to witness a tug-of-war between buyers and sellers next week once European offers take shape and negotiations start in Türkiye. PVC may remain in flux amid mild demand, elevated costs, poor seller margins, and sufficient supply. On the other hand, the approaching month of Ramadan may spur some buying interest among consumers, as they may prefer to secure their needs for the post-Eid al-Fitr period based on seasonality.

While trying to decide on their next move, PVC players will look for clues from global markets. This week, higher ethylene settlements fueled expectations of PVC hikes in Europe’s spot market, as low margins may cause suppliers to seek half of ethylene’s gain. In Asia, excess Chinese supply, coupled with an Indian major’s lower prices, cast a pall on the region post-holiday.