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European PVC suppliers seek hikes for 14th straight month in July

by Manolya Tufan - mtufan@chemorbis.com
  • 12/07/2021 (10:42)
With supply tightness showing no signs of abating, Europe continued to defy weakening in major global PVC markets and July marked the 14th straight month of hikes. However, the pace of price gains were capped amid prices hitting fresh record highs.

Hikes matching ethylene sought by suppliers

Regional PVC suppliers approached the market with another round of increases. Fresh offers mainly emerged with increases of €40-50/ton, matching the entire ethylene hike for July.

Although a regional supplier earlier attempted for larger hikes ahead of the ethylene settlement, this did not prove workable. The fact that European PVC markets hit fresh record highs and prices are found inflated by participants kept July increases in check and led to smaller increases than the previous months.

FD – Italy – PVC

Availability remains a concern

PVC supplies across the board remained tight amid lingering production issues, a lack of imports and robust demand. Kem One and Shin Etsu lifted their force majeures by late June following Inovyn and Vestolit lifting their force majeures respectively in early June and mid-June.

However, CIRES, Vynova and Kem One’s Saint Fons force majeures were in place at the time of writing. Meanwhile, Vinnolit declared force majeure on deliveries of PVC from its Burghausen and Gendorf sites in Germany on July 5 due to operational problems.

Regional availability is unlikely to improve heading towards summer holidays within the bloc. This is because both PVC producers and downstream manufacturers are running with low stocks following months of chronic tightness. Participants will be rebuilding their stocks during holidays, not to mention suppliers’ need to stock up ahead of their planned turnarounds in August.

When it comes to planned maintenances, Kem One will take its PVC plant in France offline in August. Borsodchem’s PVC plant in Hungary will undergo a planned turnaround in late August.

Meanwhile, converters have their order books full for the upcoming months and they also need to catch up with backlog orders. Buyers’ stocks of finished products are low as they have been grappling with insufficient allocations amid low producer stocks. Thereby, sellers expect to see vivid buying interest despite August holidays amid buyers’ restocking needs.

No sudden change in direction seems in sight

Players are now pondering whether Europe will continue to remain unfazed by the softening in other major markets. Meanwhile, how things will unfold in global markets will be closely tracked as import PVC prices in India have recently moved slightly up after several weeks of decreases.

Europe’s PVC markets are widely expected to remain firm so long as supply-demand dynamics witness no major changes in the upcoming days. Imports to the region are also likely to be curbed by a lack of containers and logistics challenges, let alone surging freight rates rendering import prices unattractive.

A major market participant opined, “It may be difficult to see a change in direction unless regional supplies improve or imports make their way to Europe.”
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