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An enduring challenge: Unprecedented times in PVC markets

by Merve Sezgün - msezgun@chemorbis.com
by Esra Ersöz - eersoz@chemorbis.com
  • 07/10/2021 (03:12)
The global PVC rally, which has been largely in place since the 2nd quarter of 2020, has once again gained momentum. PVC markets across the board have been hitting and refreshing record highs each week.

These all-time highs do not appear to catch PVC players by surprise any more amidst no end in sight for a supply relief and a solution to global shipping turmoil.




New all-time highs in Asia

Asian PVC markets reached new all-time highs this week as prices continued to rise amid the acute container crunch which kept slowing down import flows, tightening supplies.

Although the markets were mostly silent amid China’s ‘Golden Week’ and the awaited November announcement by a major Taiwanese producer, the uptrend persisted for another week.

The major issue in the market remained the paucity of containers in Asia. Even FOB offers were not turning into deals as buyers could not get containers to ship, traders said. This meant prolonged shipping delays and higher freight costs.

In addition to the shortage of supplies, the rising coal and crude oil prices have also provided a cost-push to the markets. Meanwhile, demand in Southeast Asia has been recovering as economies are being opened up.

PVC rally extends into 17th month in Europe

Local PVC prices in Northwest Europe and Italy extended their gains into October, marking the 17th consecutive month of increases. Regional sellers asked for hikes of around €50-120/ton for October, much larger than the ethylene outcome of €25/ton.

According to ChemOrbis Price Index data, the region’s PVC markets hit fresh record highs right after the latest round of price hikes.

Supplies have remained tight in Europe amid the ongoing turnarounds and force majeure events. Meanwhile, demand is reportedly robust with suppliers receiving a good number of inquiries from the window profile, flooring, cable, medical, and piping industries.

Low supplies push Egypt PVC markets to new highs

In Egypt, import and local PVC markets hit new all-time highs this week. Lack of offers from China amid the country’s national holidays, coupled with limited supply from the US continued to support the price rally.

The bullish PVC run is likely to sustain until the end of the year given the absence of real signs for supply or logistics relief, players noted. “Production outages in China amid energy curbs mean lower availability from the country,” they added.

Turkey stays above other import markets

Import PVC K67 prices into Turkey have continued to stay above other markets including India, Southeast Asia, China, and Egypt.

CIF Turkey K67 prices reached new all-time highs this week, as in other markets.

Despite its record profitability, Turkey PVC market is likely to continue to face supply constraints as it has so far failed to attract bulky quantities from overseas or nearby suppliers. According to players, this might be due to the fact that demand in Europe remains strong amid offline plants while the material flow from Asia is hindered amid the container issue.
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