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Firming PVC trend waning after 3 months of gains in Europe

  • 28/06/2016 (04:03)
PVC deals are being completed at higher levels for a third consecutive month across Europe. However, players are skeptical about the sustainability of a firming trend for July considering spot ethylene prices, which didn’t register any significant changes during the month.

A West European producer concluded their June PVC deals with increases of €20-30/ton from May both in the contract and spot markets. A producer source commented, “Demand was slower in Italy even though June was a long month in terms of trading activities. In France, the market is gradually recovering following the strikes. The outlook is stable to softer for July since we don’t expect to see an improvement in buying interest given the summer holidays. Ethylene costs are more or less stable.”

In Germany, a converter is negotiating to settle his June PVC contracts up €15-20/ton from last month. According to the buyer, demand isn’t encouraging in the construction sector and the outlook is steady for July. A packaging producer closed their PVC contracts with increases of €15-20/ton for June. The buyer stated that his end product demand is slow and added that he expects to see rollovers in July.

A pipe producer in the Netherlands made some purchases from the spot market paying increases of up to €20/ton for June. “A few Central European producers were holding less availability this month. Our end product demand was normal as June was a long month in terms of trading activities. For July, we expect PVC prices to register some decreases, assuming that they have reached the peak,” he noted.

In Italy, a distributor sold Central European PVC with increases of €20/ton from May this week. According to him, the PVC market is quiet and the outlook is stable for the approaching month.

A compounder bought different European origins up €15-20/ton from last month after receiving initial June offers with slightly larger increases of €30/ton. The buyer commented, “Despite concerns about the strikes in France earlier in the month, we managed to procure our normal allocation from our regular suppliers. We think that PVC prices have reached the peak this month so rollovers are possible for July.” Another compounder reported that his end product demand has been good this month. For July, the buyer is anticipating a stable to softer trend.
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