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Egypt’s import PVC market in short supply; local prices gear up

by Başak Ceylan - bceylan@chemorbis.com
  • 24/11/2020 (04:04)
Import K67-68 offers in Egypt look set to end November on a firm note as a continued tightness in supplies is keeping the pricing direction pointed upwards. The domestic market has also been feeling much tighter for buyers looking to source large volumes of PVC domestically. And in view of this bullish environment, local producers are stepping up efforts to push through higher prices.

Supplies remain broadly restricted

The PVC supply chain has seen little relief, as outages from hurricanes and maintenance shutdowns persisted at the US producers’ plants along the Gulf Coast. Although market players were positive that substantial output gains and inventory recovery could emerge in November, the availability has so far been scarce in Egypt.

Import prices at their highest since 2008

As can be seen from the graph below, import K67-68 prices have been on an uptrend for the past eight months. Even as prices slightly eased in October amid a brief appearance of lower priced forward-shipment cargoes, the persistent tightness has brought the latest levels to their highest in more than 12 years.



A 2% customs duty, imposed on PVC imports from non-Arab countries, has also been cited as one of the main reasons for increased prices. In addition to the 2% duty on PVC, ethylene dichloride (EDC) was exempted from taxes in an effort to provide local producers a competitive edge against imported materials.

EPC, TCI Sanmar offers up nearly 70% in 5 months

Local producers, meanwhile, have been either maintaining or increasing their offers since the start of the third quarter. Supported by persistent tightness in availability, EPC and TCI Sanmar’s offers have increased by nearly 70% on average since June.

Tracking the gains in both import prices and local producers’ announcements, domestic offers have increased by almost two-fold around the same time. With reduced availability chief among the culprits, many converters have turned their attention to the local producers’ increased export quotas.

Meeting scheduled to discuss PVC shortage

There have been reports of reduced allocations from the local producers for the past months.

Sources reported that the majority of the producers’ output has supposedly been allotted for export markets. According to market sources, a meeting took place on the evening November 23 between Egypt’s leading cable and pipe manufacturers and the local producers, EPC and TCI Sanmar, to discuss the shortage in the market.

The outcome of the meeting is hoped to result in an agreed set of targets that are in favour of both the local producers and the buyers.
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