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Turkey’s PVC market back to May highs on heels of tightness

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 13/08/2021 (03:40)
PVC has trended higher since August started, while Turkish PVC consumers have had a hard time adjusting to new offer levels. The main driver behind the rapid hikes has been tightness. Supply woes crept into the market due to reduced export volumes from Europe, Asia, and the USA, while dwindling local availability bolstered demand.

According to the weekly average data from ChemOrbis, the dutiable and duty-free PVC K67 markets have climbed by $195/ton (13%) and $140/ton (9%), respectively, so far in August. The recent offers point to the highest levels since H2 May.

PVC K67 Prices – CIF Turkey

Turnarounds curtailed exports from Europe

The nearby European PVC market was unfazed by the long summer holidays as a slew of scheduled shutdowns at several plants kept stocks low, not to mention still-buoyant demand. Reduced quantities from the region into Turkey pushed the duty-free K67 market up, with offers heading for $1800/ton CIF or above.

Adding to the scene has been a scarcity of US offers

“Most buyers had kept their purchases hand-to-mouth during the downturn in April-July, which caused a demand revival in August. Adding to the stronger scene have been scheduled turnarounds in Europe and buoyant domestic demand in the USA, as both led to tighter supplies into Turkey,” multiple players opined.

A very limited number of American offers were reported at $1680/ton subject to 6.5% customs and 32.93% AD duty this week. This single level was up by another $30-40/ton following triple-digit hikes in early August. This was because export volumes from the US were reduced given the active demand at home. In the coming term, activity is likely to remain bolstered by a USD1 trillion infrastructure package that has recently been approved by the US Senate.

Logistic mishaps, elevated freights blocked Asian cargos

South Korean PVC K67 offers have reached up to $1800/ton CIF Turkey, driven by elevated freight rates amid a lack of shipping space.

In Asia, major markets, including India and China, also showed a brisk performance amid reduced quotas and delayed September offers from a Taiwanese major, as well as shipping issues. "Firm expectations across the region coupled with logistic hurdles and improved demand in India may keep Turkey from competitive Asian cargos in the coming term," opined a player.

Petkim pioneered visible hikes in the local market

The local PVC market followed suit, as rising demand for prompt availability as well as low stocks at the domestic producer, Petkim, led to additional gains for the second successive week.

Indeed, Petkim pioneered the bullish run in the distribution channel as the producer applied $90/ton hikes to its list PVC prices early in August. According to the latest reports, the company is currently running its PVC plant at 70% capacity due to a short VCM supply.

The distribution channel has soared $140/ton (7%) for PVC K67 on a weekly average from late July, ChemOrbis data revealed.

PVC consumers having hard times adjusting to new prices

The short-term outlook remains strong based on a globally firm scene and ongoing supply concerns. Most players agree that converters who are in need of material will most probably have to pay the noteworthy hikes.

On the other hand, PVC buyers see the latest round of increases as unhealthy and comment that the current market trend may not be sustainable in the long run. "These hikes emanated from pent-up demand that followed a long period of sluggishness, while we see them as artificial. At some point, buyers may start to resist again," claimed a manufacturer.
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