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Are record-high PVC prices the new normal amid enduring pandemic?

by Merve Sezgün - msezgun@chemorbis.com
  • 09/09/2021 (03:10)
The global PVC rally, which has been in place since the 2nd quarter of 2020 if some short-term correction periods are ignored, has once again gained momentum amid the ongoing shipping crisis and supply shortages. Import prices in major markets have broken their previous peaks, raising the questions: How long will this rally last? Are the record-high PVC prices the new normal?

“Nobody seems to have an answer to these questions at the moment. The PVC rally is still well supported across the world, and we won’t be surprised if prices continue to gain ground despite the fact that they are already at all-time highs. But frankly speaking, the latest increases have been quite sharp and we are taking a more skeptical view of the sustainability of them for the simple reason that there’s only so much the end-user market can take,” noted an Indian trader.


Prices set new records in India, Turkey, Egypt, and Europe

ChemOrbis Price Index data reveal that import PVC K67 prices on CIF India/Turkey/Egypt basis have recently broken their previous peaks and hit fresh all-time highs. In Europe, local K67 prices on FD Italy/NWE basis have also reached fresh record highs with the region’s bullish trend entering its 16th month in September.

PVC Prices India Turkey Egypt Italy


The weekly average of K67 prices for all origins surged to a record high of $1750/ton CIF India this week, with some players expecting prices to hit $1900/ton levels in the near term. “The Indian market is extremely tight and demand is robust. We’re not sure whether the Taiwanese major, currently on a shutdown, will have enough product to offer India for October. They may apply a three-digit hike; a $250-300/ton increase won’t surprise us,” said an Indian trader.

In Turkey, import PVC prices have surpassed the peaks recorded in March while players expressed their concerns about how far prices can rise amid severe supply constraints. Although players agreed on the fact that the outlook remains strong for the remaining part of September, they said, “Yet, we question the sustainability of the prevailing highs in Turkey, where PVC buyers have already been exposed to inflated costs in every sense.”

Players in Egypt reported that import offers were very scarce this week as supply tightness persisted, with a couple of major US suppliers declaring force majeure after Hurricane Ida hit Louisiana last week. “Sellers are holding onto their offers given limited availability and high replenishing costs,” they noted.

China and SEA markets near all-time highs

Import PVC prices in China and Southeast Asia have struggled to keep pace with Indian prices. However, the spillover sentiment from India has pushed them to near fresh record highs recently. The weekly average of import K67 prices in China has surged to $1440/ton CIF, $110/ton below its peak recorded in April.

With India offering better netbacks, Northeast Asian sellers focused more on India than SE Asia and China. “Most suppliers are focused on the Indian market. Offers to China and SEA will likely remain notional,” said a Singapore-based trader.

Tightness and shipping issues continue to fuel bullish views

Most players believe that the PVC rally may remain intact over the short term given global supply crunch, vivid demand across the board, and escalating logistic costs and shipment delays.

“Sentiment has stayed bullish in the wake of Hurricane Ida’s disruptions on USG PVC production, which affected some 40%. Supplies in Asia and Europe have already been tight due to the ongoing maintenance shutdowns and force majeures. Sky-high freights also keep import prices elevated. However, we might soon start to see buyers in major markets resist further hikes in offers which have risen quite sharply,” commented a few traders operating in the Asian and the Mediterranean markets.
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