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European PVC players expect increases to fade amidst improving supplies

  • 27/04/2017 (09:49)
Contrary to the weak sentiment in other global markets, PVC prices in Europe have been following an increasing trend since late January mainly due to limited supplies in the region.

Although sellers were able to implement hikes above the monthly ethylene contracts for the last two months, some players who expect PVC to follow a mostly stable trend in May argue that this may change in the days ahead, citing the slight improvement on PVC supplies as well as the ethylene contracts which were fully settled with a rollover at €1050/ton FD NWE.

A source from a West European producer commented, “We closed our April deals €20-30/ton higher from March despite the stable outcome of the April ethylene contracts as demand has been very good this month. We think April was the last month that the increases exceeded those in the monthly contracts, because of which we expect to see a mostly stable trend in May.”

A pipe producer from the Netherlands opined, “We think there will not be additional increases in May given the downwards pressure from other global markets. Plus, supply has already started to improve.”
Similarly, a few players in Italy reported that they think PVC prices will be rolled over in May, following the new ethylene contracts.

A plastic end product manufacturer in France also noted, “We believe there is no reason for increases on PVC prices as supply is improving and it is in balance with demand. We think PVC market is standing close to a turning point now.”

Meanwhile, European PVC k67 offers in Turkey retreated by $30-50/ton this week in the midst of the buyers’ resistance to high offers. A pipe maker said, “We received lower PVC offers from a West European producer and from European traders this week. We attribute these price reductions to the globally weak PVC sentiment due to weaker energy market.”
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