European PVC markets rebound from more than 3-year lows

In Europe, spot PVC prices hit a 3-year low back in December and failed to stage a rebound until March. As fresh PVC offers have just started being unveiled with increases, a mild uptick in the price assessments pulled prices from multi-year lows.

Hike attempts seen after two months of stability

PVC suppliers failed to achieve margin recovery in January and February, with prices mostly being rolled over, as the market remained unresponsive to the logistics disruptions and reduced import offers.

Regional sellers approached the market with hike requests of €20-30/ton following the €30/ton increase in the ethylene settlement. More offers will be revealed next week, while initial offers mostly indicated hikes beyond the half of ethylene’s upsurge amid sellers’ attempts to recoup their margin losses. Larger increases of up to €50-70/ton seen in a few cases are expected to be revised next week, meanwhile.

Price assessments stood €10-20/ton above last week at €940-1020/ton for K67-68, €960-1040/ton for K70 and at €950-1030/ton for K58 and K64-65, all on FD Italy, 60 days basis. In West Europe, prices reached €850-935/ton for K67-68, €870-955/ton for K70 and €860-945/ton for K58 and K64-65 with the same terms.

Accordingly, spot PVC K67-68 prices on FD Italy/NWE basis rebounded from more than 3-year low, as per the weekly average data from ChemOrbis.



Demand yet to catch up with price gains

Suppliers aim to stand adamant at their initial offer levels given profitability issues. A regional source said, “We are not willing to concede to increases smaller than €20/ton as we couldn’t obtain monomer hikes last month.”

Still, it remains to be seen if initial hike requests will be absorbed amid weak market fundamentals. Despite disciplined rate cuts and higher exports, overall supply was more than enough to meet requirements. A lack of imports created no major concerns, as a side note.

Buyers are reluctant to pay larger increases, surpassing the 50% of ethylene hike, citing sluggish demand for several applications. That is to say, sellers’ margin recovery targets may be thwarted by poor demand at home if seasonality fails to kick off going forward.