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Downturn persists for US PVC, import offers break below $900 in major markets

  • 26/10/2017 (04:11)
PVC prices have been falling since early September in the export markets of the US as Harvey driven issues left no visible impact in their wake. A player noted, “This happened to be short-lived thanks to a rapid recovery in operations.” This week, players in many major markets reported that import offers for US PVC have broken below the $900/ton CIF threshold in the midst of poor demand and growing supplies.

Looking at the Middle Eastern markets, US k67 offers posted cumulative decreases of around $80-100/ton in Turkey and Egypt since early September, according to ChemOrbis Price Index, to freshly move below the $900/ton CIF threshold this week. Expectations about seeing further discounts and subdued end-business were cited among the reasons keeping converters away from sourcing overseas cargoes.

Several players in Turkey are confident that they will see much lower US PVC offers in the import market. Sellers commented, “The market is not likely to see a rebound in the near-term as Turkish manufacturers are sticking to the sidelines moving towards the year-end due to their sluggish export business as well as their expectations for further decreases. Plus, supplies are expected to be palpable when en-route cargoes arrive amidst thin activity.”

Similarly in Egypt, demand for US PVC remains discouraging as buyers prefer to stick to the local market for their urgent needs. Players are hesitant to engage in fresh purchases from the import market as they wait for further discounts. “Traditionally, players start securing their needs in October- November in order not to face delayed shipments in December; however, this has not materialized yet this month,” noted a trader in Egypt. Tight liquidity is also harming purchasing power.

US PVC offers have also been retreating in Asia, where Formosa’s lower November announcements have exacerbated the bearish sentiment in PVC markets. In China, US PVC offers broke below the $900/ton CIF threshold last week. A Taiwanese producer commented, “The November outlook is soft given weak demand towards the year-end, when more import volumes are likely to find their way to Asia from the US in line with the resumed production after Harvey.”

US k67 offers have also surfaced in Vietnam this week, standing well below this threshold on CIF basis. Unlike the other markets including Turkey, China and Egypt, US offers were found competitive in Vietnam, forming the low end of the overall range.