PVC inches up in Europe after 2 months; demand remains a drag on pricing

PVC sellers’ efforts to hinder further margin erosion seem to have borne fruit in July as the market navigates through a complex landscape, characterized by tentative price increases and unsupportive supply-demand conditions. As negotiations for July are still ongoing, some deals started to be closed with modest hikes of €10-20/ton.

Tight margins, firmer exports blamed for higher pricing

Some producers approached the market with hikes of up to €50/ton, albeit in a market where prevailing conditions have not been wholly supportive. The primary impetus behind hike attempts stemmed from tight margins and the uptrend in global outlets. Some suppliers leveraged higher export prices to issue substantial hikes in the EU, while others offered both non-European and spot materials with €30/ton increases.

However, initial hike requests mostly failed to work amid stiff resistance among buyers, who were pushing for milder increases or rollovers. A player opined, “Underlying demand should improve to raise prices by larger amounts.”

Some call it “still a buyers’ market”

Buyers have shown resistance towards hikes due to several factors. Market conditions remain subdued, with weak demand being prevalent across all countries. As the summer break approaches, consumer demand for PVC profiles and pipes remains lackluster.

Supply, however, continues to be comfortable despite limited imports, providing little support for significant price hikes. Despite rising prices, export activities to Türkiye have not shown a visible improvement, keeping sales volumes limited.

Demand dynamics were nuanced across regional markets. Activity in Central Eastern Europe was slightly better than in Northwest Europe, which is probably related to the summer vacations.

August calls for stability to some hikes

Early indications for August are calling for a rollover or slight increases amid firmer ethylene expectations. With demand failing to show signs of improvement and many buyers preparing for lower rates or closures during the summer break, the market sentiment leans towards stability or slight fluctuations rather than strong upward adjustments. Some converters in Southern Europe plan to shut their plants for two to three weeks, which will keep needs limited in August.

The construction sector is muted amid a lack of investment activity, which leaves little room for notable price hikes in August. This sentiment is echoed across various segments, where minimal purchases are favored to avoid accumulating stocks amid subdued consumption forecasts extending well into 2025.

Suppliers to revisit price hikes in September

While short-term challenges persist, the outlook remains cautiously optimistic. Producers are bracing to revisit price hikes in September, anticipating that demand may strengthen post-summer amid restocking needs and the impact from provisional anti-dumping duties will be notably felt. Indeed, import offers are being heard more sporadically. They may want to implement price adjustments that were not fully achievable in July. However, things hinge heavily on developments in raw material costs and overall demand recovery.

Turnarounds also reinforced optimism. According to industry sources, Borsodchem will shut its plants in Hungary for a regular turnaround by mid-July for a month. Kem One will reportedly conduct a planned TAR at its Fos-sur-Mer caustic soda and chlorine plants starting from the beginning of November. Production is expected to be resumed in early December. During the same period, the producer plans to conduct a TAR at its Berre plant.