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Higher ethylene scraps softer expectations in European PVC market

by ChemOrbis Editorial Team - content@chemorbis.com
  • 08/12/2017 (15:50)
In Europe, PVC prices started to be revealed with rollovers to slight increases after monthly ethylene contracts settled with larger than expected increases of €32/ton. Although December expectations were mostly calling for a softer outlook given limited working days and comfortable stock levels, the higher outcome of the ethylene contracts seems to have scrapped softening expectations.

West European producers aim to achieve the half cost of ethylene contracts whereas buyers take a waiting stance, assuming that suppliers will have to step back from initial hike requests amid destocking concerns. Moreover, some of the European sellers have already rolled over their prices or applied smaller hikes compared to November considering that they will be able to close deals only in the first half of December.

A West European supplier offering with €15/ton increases said, “We aim to recover our margins and we are not willing to step back for now despite buyers’ resistance. Yet, we will see the reaction of the market.”

A PVC compounder in Italy said, “We have purchased some material with rollovers in December. European suppliers, who are asking for hikes, will concede to some discounts later in the month and close deals with rollovers to slight increases of €5/ton as demand is thin and there are year-end destocking activities in place.”

Converters are almost sure that they will be successful in obtaining rollovers this month considering the nature of December; however, they expect some hike attempts in January due to the producers’ will to recoup their margins.
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