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PVC sellers: Supply issues to gain prominence in Sept in Europe

by ChemOrbis Editorial Team - content@chemorbis.com
  • 09/08/2017 (10:17)
In Europe, August PVC deals started to be concluded mostly with rollovers due in part to the stable outcome of ethylene contracts and fading activities ahead of the holidays. Production outages as a result of the fire at Shell’s refinery exacerbated supply concerns between players, who were already expecting a rebound in September.

However, some sellers reported that Shin-Etsu’s force majeure declaration on PVC k67 output from its Pernis plant is yet to affect the PVC market amid the current stance of demand due to the limited working days. Sellers hold firm expectations for September, though as they remarked, “Supply is rather limited in Europe and PVC prices are increasing in China. These factors might lead to an upturn in Europe as well.”

A distributor said, “Our allocations should be regular for August despite supply outages at Shin-Etsu. However, demand is weak due to the holiday lull in Italy.”

A seller from Belgium confirmed, “Our demand is good as we had more holidays during July. Supply is limited as we don’t have extra cargoes to sell. We expect some increases in September thanks to good demand.”

Not only supply issues but also the recent gains in ethylene monomer and firmer crude oil prices support the bullish expectations for PVC in September.

On the buyers’ side, converters already reported to have closed their deals at rollovers. A compounder from France commented that Shin-Etsu’s availability might be less than normal following the force majeure, but August will not be influenced by this absence as other origins are balancing supplies. He added, “As for September, we expect a stable to slightly higher trend.”

A buyer in Italy had noted, “Demand is poor now but we are seeing a good number of orders for September.”
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