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Egypt’s PVC markets set to end 2021 on weaker footing

by Başak Ceylan - bceylan@chemorbis.com
  • 28/12/2021 (09:44)
The downtrend that has begun by mid-October looks set to extend into 2022 in Egypt’s PVC markets. Chinese PVC K67-68 offers ended last week with drops and antidumping duties imposed on US materials further dampened buying interest.

Meanwhile, Mexican PVC K67-68 appeared at levels below US materials, offering a more competitive alternative.

Chinese PVC offers down considerably from Oct peak

A sharp weekly drop in mid-October put the first dent in import PVC pricing. The market had previously been on a steady uptrend since early August, supported by record-high freight rates, knock-on effects of increasing coal prices in China, and stronger feedstock costs.

After having been on the rise through the year, freight costs peaked in October and started easing. Although container availability shortage, shipping route disruptions and firm demand still support freight costs, market players breathed a sigh of relief in mid-October as record-high levels showed signs of easing.

The Chinese government’s intervention to bring down coal market futures that had tripled this year also relieved pressure from PVC K67-68 prices. The sky-high levels in coal prices, which had resulted from alarmingly low supplies of coal, had a boosting effect on import Chinese materials in the Egyptian markets in early October.

Offers for Chinese ethylene based PVC were at $1650-1720/ton ($1683-1754/ton including 2% customs duty) while acetylene based Chinese offers were reported at $1550-1630/ton ($1581-1662/ton including 2% customs duty) by the end of last week.

Antidumping duties on US PVC weigh on buying appetite

Meanwhile, the US offers fell below the $2000/ton (excluding 2% customs duty) mark by mid-December, largely as a result of thin buying appetite. The anti-dumping duties imposed on US cargoes added to the situation as rising costs pushed the US cargoes out of competition with other import materials.

The duties were announced by the Egyptian Ministry of Commerce on December 5, 2021. The investigation, initiated by a local PVC producer, resulted in antidumping duties of 9% of the overall CIF value (no less than $86/ton) for US PVC.

US offers ended last week at $1800-1850/ton ($1836-1887/ton including 2% customs duty) while Mexican cargoes provided a more competitive edge over US cargoes at $1750-1760/ton CIF ($1785-1795/ton including 2% customs duty).

Early expectations for January remain weak

According to ChemOrbis Price Index, the overall ranges for import PVC K67-68 offers suggest the lowest since mid-August this year.

CIF – Egypt – PVC – Import
The outlook for the near-term is largely for a continued easing in import PVC pricing, largely due to the underlying weakness in demand and increasing material availability.

Players are expected to closely monitor supply developments from Q1 2022 and onwards with new capacity online and major maintenance turnarounds concluded at Egypt’s top import sources.
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