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Are US PVC prices nearing the bottom?

  • 20/11/2017 (04:17)
An increasing number of players across the global markets are questioning whether or not American PVC prices have any additional room to move lower, with some traders opining that US producers may intend to raise their offers for December since prices already decreased in the recent months significantly.

“The recent rebound of spot ethylene prices in the US might also support sellers if they decide to take a firmer stance on their offers,” a few players also commented.

Last week, American PVC offers continued to witness declines in major export markets, maintaining their softening trend which kicked off in the second half of September following some considerable gains in the post-Harvey period. Offers for PVC k67 emerged slightly above the $800/ton CIF threshold in several markets, including China, Southeast Asia and Turkey while they already hit this level in Egypt.

In Turkey’s PVC market, the downward pressure persisted last week in the face of the emergence of competitive European prices as well as the ongoing falls for US PVC in nearby Egyptian market. However, several players opined, “PVC prices may rebound in December as the market has already declined largely and demand may recover by the new-year.” A few buyers also argued that sellers were no longer eager to step back further from their offer levels when firm bids were placed.

In China and Vietnam, competitive US offers also formed the low end of the overall price ranges last week, with a Vietnamese converter saying, “We believe that we can only obtain a $10/ton discount if we decide to buy some US materials.” Meanwhile, most sellers across Asia said, “The market is now very close to its bottom level and prices might rebound soon if demand in India starts to improve as expected.”

Players in Europe also reported receiving import PVC offers from the US at levels standing at least €85/ton below the low end of the local spot range. Therefore, they continued to be found attractive.

On the other side of the coin, some players still do not exclude the possibility of seeing some further reductions in prices, saying, “US producers might be willing to give some slight discounts in their offers in order to be able to clear their stocks ahead of the end of the year. Plus, the global markets remain under downward pressure due to a major Taiwanese producer’s larger-than-expected decrease in its December offers to Asia amidst disappointing post-monsoon demand in India.”
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