Early October expectations emerge in the European PVC market
A South European PVC producer concluded some spot deals with decreases of €45/ton for September. A producer source commented, “Demand is good and some producers are holding low stocks. It’s too early to comment on the October outlook, but we think that stabilization is possible depending on the upstream markets and producers’ stocks. We do not expect to see further reductions next month.”
A West European producer expects to settle their September PVC contracts with decreases of €45/ton from last month. A source from the producer reported, “Demand is regular, but some buyers are taking a waiting stance in anticipation of a price relief for October. Looking at feedstock costs, we think that PVC prices might emerge with rollovers to slight decreases next month.”
Even though producers started to question the possibility of a stabilization for the upcoming month, the majority of the players think that PVC prices still have room to inch down further for now. Looking at the upstream markets, spot ethylene prices are stable week over week whereas spot naphtha prices retreated at the beginning of this week to move below the $400/ton threshold on a CIF NWE basis.
In Italy, the latest spot PVC prices are quoted at €855-930/ton for k67 and at €860-960/ton for specialty grades, FD, 60 days deferred payment. Distributors of a Central European producer conceded to further slight reductions from their initial September prices. According to the sellers, buyers remain cautious in anticipation of further softening in October. The sellers also do not expect to see a reversal in trend as feedstock costs remain low and supply is sufficient and anticipate further slight decreases for the upcoming month.
Several converters made some purchases with discounts of €45/ton for September and said that they are not planning to buy additional volumes until October when they expect to see further softening. Some of them reported receiving offers for US material. Offers for this origin were quoted at a single level of €780/ton on a DDP Italy, including 6.5% customs duty, 60 days deferred payment basis. Despite standing at relatively lower levels compared to local prices in Italy, US material failed to attract buying interest due to weak expectations on the buyers’ side for October.
In Germany, a distributor sold West European PVC with decreases of €45/ton from last month at €880-900/ton for k67, at €900-910/ton for k64-65 and k58 and at €900-920/ton for k70, all on an FD, 30 days deferred payment basis. The seller commented, “The market is quiet for now as buyers expect to see further reductions for October. We are not building large stocks as we also project a softer trend for next month.” Some buyers settled their September PVC contracts down €45-50/ton from last month. Regarding October, the buyers think that the PVC market has room to move slightly lower.
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