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Demand pressure casts cloud on PVC hikes in Türkiye

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 01/12/2023 (11:51)
Sellers have been adopting a firmer stance since early November, when PVC witnessed hike attempts for the first time after August in Türkiye. The relatively improved sentiment among suppliers was underpinned by a cautious recovery in Asian markets. Nonetheless, lethargic demand put a lid on increases, and the market was rangebound by the end of the month.

CIF Türkiye – Import Prices– PVC K67

Hikes from a Taiwanese major fail to stimulate buying

Higher price notifications from a Taiwanese major producer for December led to a temporary firming in Asian markets until a lack of support from downstream demand weighed in. Bullish news received a lukewarm reaction from Turkish buyers as they continued to voice their buy ideas with rollovers or even small discounts during industrial events, including the Eurasia Window Fair and Plast Eurasia, that took place in November.

Lackluster demand limited the size of price gains, while import K67 prices have only increased by $20-30/ton on a weekly average compared to late October, as per ChemOrbis data.

PVC hikes pushed back by buyers amid low season

European suppliers expressed their K67 sell ideas close to $880/ton CIF Türkiye a few weeks ago, following deals well below the $850/ton threshold by large converters back in October. Although offers for new shipments were few and far between in line with sellers’ complaints about poor margins, some quantities emerged at $830-850/ton.

“Despite suppliers’ efforts to lift the market, weak market conditions capped hike requests in most cases. The off-season, prolonged liquidity issues and the limited spillover impact from the firming in Asia all caused suppliers to step back from their earlier targets,” a player commented.

The duty-free K67 range was assessed at $810-850/ton CIF Türkiye, cash this week. Within the range, South Korean suppliers stepped back from their earlier hikes and turned to rollovers in some cases since buyers did not seem interested in paying any hikes for these distant cargos.

Dutiable prices fluctuate as sellers lose confidence

Earlier in November, traders approached the market with US K67 prices nearing or even surpassing the $800/ton CIF mark, citing firmer export offers out of the country and the upturn in Asia. Offers varied between $770-810/ton at the time, before thin interest from consumers forced sellers to revisit their sell ideas. Multiple players reported hearing US K67 prices as low as $730-750/ton during the industrial events, which also cast a shadow on firmer sell ideas.

“Although these levels might have emerged for short sales, they reflected an unpromising demand outlook and sellers’ fading confidence,” a player said.

Looking at other dutiable origins, new shipment Russian K67 was sold with $20-30/ton discounts from early November at $770/ton CIF, subject to 6.5% customs duty, cash, according to a manufacturer’s confirmation.

Global markets point to a soft trend in December

Now that the PVC upturn has stumbled, cautiousness has returned and expectations for the year-end point to a stable to soft trend in Türkiye. Margin concerns may hold prices close to the prevailing levels in the near term, with no further hikes. Some players do not rule out the possibility of modest discounts on deals in the case of firm counter bids from PVC consumers.

This is also based on the soft scene in other PVC markets. Europe may see softer PVC prices next month amid lower-expected ethylene contracts and the nearing year-end holidays. China failed to sustain its firming trend despite strong ethylene costs as reduced run rates at downstream segments during the low season weighed on the sentiment.

Impact of probe on imports into Europe under discussion

In the meantime, players evaluated the potential impact of Europe’s investigation on S-PVC imports from Egypt and the US. Most of them do not expect to see a major effect on the market immediately, pointing to the long process. Nonetheless, they agree that trade flow in Türkiye would also be affected by the outcome of the probe in the long run.

A buyer said, “The news reflected the unpromising PVC demand outlook within Europe. If applied, anti-dumping duties on imports to the region may cause Egyptian and US suppliers to direct more cargos to Türkiye and weigh on the market next year.”

Traders said, “Nearby Egyptian cargos may exert a pressure amid favorable geographical conditions in the long run. US PVC will also remain an option with its re-export advantage for converters. We believe that demand for domestic materials or Mexican cargos with ATR may revive if European volumes diminish upon completion of the investigation in the region.”
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