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Initial PVC hike targets exceed expectations in Europe on margin recovery

by ChemOrbis Editorial Team -
  • 07/02/2017 (17:26)
PVC sellers in Europe started to reveal their February offers mostly with large increases both in spot and contract markets.

Sellers were expected to approach the market with larger hikes than half of the ethylene contract increase on the back of short supplies and low stocks. However, major producers are now targeting increases not only outstripping half of the ethylene hikes but also larger than the full hike of €35/ton achieved in ethylene contracts in an attempt to recover their margins lost during the last quarter.

In the PVC contract market, a West European producer announced their new February prices with €50/ton hikes from last month, citing that they are aiming to recover their margins. A producer source commented, “Demand was good in January partly due to the lack of import material and we expect demand to be good this month as well.”

Kem One also announced their February spot offers to Italy this week, up €40-45/ton from last month as they are planning to recover their margins. A producer source said, “Although it is still early to receive feedback from buyers, we expect demand to pick up this month.”

A different European producer announced their February offers with an increase of €25/ton from last month. “We assume that buyers won’t show resistance to these hikes. Plus, demand is good this month and we want to recover our margins as we applied minor increases last month,” added the producer source.

Another European producer, whose initial offers are €35/ton higher from last month, commented, “We will see the reaction of the market during the week. The upward trend is likely to persist in March as well.”

However, the early February deals reported so far are being concluded with €20-25/ton hikes.

In Italy, a distributor reported to have sold part of his allocation with €20-25/ton hikes for February as buyers are accepting only this size of increase. The seller said, “Demand is better than last month. Overall supplies are not ample and this might put pressure on prices.”

Meanwhile, a buyer reported to have purchased Central European material with €15/ton increases from January, adding, “We have received a few offers with increases of up to €40/ton, but we will wait to see if other producers will lower their prices from their initial hike targets.”

In Italy, PVC ranges are currently quoted at €865-990/ton for k67 and at €885-1020/ton for specialty grades, while in Northwest Europe, prices stand at €825-910/ton for k67 and at €860-940/ton for specialty grades, all on local terms.
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