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European PVC looks for direction amidst flat ethylene, tightness

  • 31/03/2017 (04:08)
PVC prices in Europe were on an upwards trend since mid-February supported by higher ethylene costs and supply issues across the region. However, the previous firm expectations for April faded following the unchanged ethylene contracts in the region.

According to ChemOrbis Price Index, Italy’s local PVC k67 market hit the highest levels of almost 20 months by March on a weekly average, while prices in Northwest Europe also saw 17-month highs.
According to widespread predictions, European PVC suppliers will return with some hike attempts albeit for modest amounts blaming the still tight availability stemming from shutdowns in the region. Yet, converters are set to resist any increase requests as they think that the market can’t digest any further hikes based on globally weak PVC markets including China, Turkey and Egypt.

A source from a West European producer reported, “We plan to seek further increases for April regardless of the flat monomer contracts. Demand is not bad and we already received some orders.” The producer obtained €80/ton increases on their March PVC transactions. A second regional producer noted, “We achieved €60/ton increases for March. We expect supply-demand dynamics to dominate the market and we intend to raise our offers to preserve our margins despite the rollovers on the ethylene settlement. Plus, availability remains limited.”

A manufacturer in Germany paid increases of up to €50/ton in March. He commented, “The outlook for the new month is stable as April will be a short working month given several holidays which would hinder demand. Moreover, other markets are not performing well as Turkey is right ahead of a political referendum and activity is weak in China. We believe that PVC prices already reached the peak and will stabilize in April.”

In the meantime, a pipe maker in the Netherlands highlighted, “The developments in the feedstock markets have been hampering the upwards trend together with lower prices in Asia. Nonetheless, a new round of €20-30/ton increases is likely to emerge due to tightness.”

Similarly, lackluster buying appetite and falling American PVC prices weighed down on the sentiment in Turkey’s import PVC market. Now that April ethylene contracts have been rolled over, Turkish buyers believe European PVC offers will ease down next week.
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