European PVC outlook under discussion ahead of holidays
Expectations are mostly centering on a softer PVC outlook despite promising crude and naphtha costs, which might support a slight increase in the monthly monomer contracts.
Given the boosted import quantities on top of the comfortable stock levels in Europe and poor export demand, PVC suppliers are facing a length in the PVC market ahead of the holiday period. Accordingly, players mostly think that PVC prices are more likely to post decreases next month regardless of the outcome of next ethylene contracts.
A distributor offering Central European material reported, “We expect €10-20/ton decreases in PVC prices for December, even though ethylene contracts settle higher as demand will be %50 less than usual.”
On the buyers’ side, similar thoughts were shared by converters amid slowing demand for their end business towards the year-end. A profile maker from Belgium noted, “We expect small decreases in PVC prices even if the energy complex remains strong.”
On top of the already comfortable local supplies, buyers might prefer to source from the import market given the favorable parity as well as the competitive prices for US materials. In Italy, US k67 is offered on DDP basis well below the local ranges while the same origin was also dealt €40/ton below the local ranges in the Netherlands on DDP basis.
However, there are also others who expect to see stability if ethylene settles higher. A West European producer already argued that they will keep their December prices stable if ethylene settles €15/ton higher.
An Italian compounder, who concluded deals with rollovers to €10/ton decreases, also said, “As for December, we expect a stable trend as the energy complex is firm and ethylene contracts might be rolled over as monomer prices are already high.”
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