Pre-buying for PVC hampered by bearish Jan outlook in Italy
A distributor sold Central European PVC €25-30/ton below last month. “Demand was not bad this month, but converters did not do any pre-buying due to their expectations of seeing further reductions in January. We think that PVC prices may decline by €20-30/ton next month,” he commented.
Another distributor concluded some December deals with decreases of €25/ton for West European PVC. The distributor said, “Demand may improve in January as buyers avoided building stocks due to their bearish expectations. We think that ethylene contracts may settle with decreases of at least €50/ton from December considering weak crude oil and naphtha costs.”
Most buyers have met their monthly requirements while they avoided securing large volumes, thinking that PVC prices still have room to move lower given bearish energy markets. A converter reported that he is planning to close 2014 with low stocks and added that he will make additional purchases in January when PVC prices are likely to lose further ground.
A compounder reported, “We only bought a limited volume this month as we expect the PVC market to maintain its downward trend in January. Upstream markets may remain bearish until March.” Another buyer added, “The outlook is bearish for January and even our end product customers are taking a waiting stance for now, knowing that further decreases are on the way given plunging crude oil prices.”
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