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Türkiye’s PVC market back to May levels on mounting buyer resistance

by Merve Madakbaşı -
  • 29/09/2023 (02:01)
Most PVC markets have buckled under reduced resin consumption across the board, moving into the last quarter of 2023. China’s worsening real estate crisis and bulky imports of India and Türkiye that took place in late Q3 dampened the demand outlook, not to mention the pressure from ample US stocks on markets.

Weak macroeconomic dynamics have dragged prices down in Türkiye since early September, despite surging feedstock costs. Sticky inflation and liquidity issues continue to take their toll on resin demand and derivative segments, let alone bearish expectations for next month.

*Right click the image and open in a new tab to view the full-sized snapshot.

CIF Türkiye – Ex-warehouse Türkiye – PVC K67

As can be seen from the ChemOrbis Market Snapshot above, PVC has been defying the bullish upstream chain as the main factors driving the market evidently remained supply and demand once again.

European PVC K67 emerges below $900 CIF after 4 months

Unpromising demand outlook and a lack of supply concerns have led to a good number of import offers, with suppliers seeing no reason to hold onto their fresh prices. Buyers confirmed, “We have received more calls from our suppliers, asking for our bids.”

Major European producers revealed their October PVC prices with $20-50/ton drops on the month at $890-900/ton CIF Türkiye, no duty. According to ChemOrbis data, the last time European K67 broke below the $900/ton mark was back in May. This was right before prices witnessed a freefall and eventually found a floor at around $800/ton on a weekly average in July.

In the meantime, two regional producers are planning to conduct turnarounds at some of their emulsion or suspension PVC lines for next month. The impact of these capacity losses is likely to be overshadowed by unpromising demand, players argued at the time of writing.

American offers touch $800/ton CIF on comfortable supply

Ebbing demand from the key Indian market started to drag dutiable prices down in Türkiye earlier this month, while rising inventories in the USA weighed down on producers further as September wore on. After seeing attempts for prices at or above the $900/ton CIF mark back in August, ex-USG cargos posted gradual discounts to touch $800/ton by late this week, succumbing to long supply and thin interest.

This was not caught players’ surprise considering that US origins were traded in the high-$700s/ton CIF India, weighing on the low end of this import market. Multiple players confirmed hearing that a Taiwanese major has been facing difficulty selling out its October quotas to Asia.

A global trader commented, “This is because Indian players replenished plentiful import cargos back in mid-to-late Q3. Somehow, the producer has not applied a further discount so far, while this may be due to higher crude oil futures and ethylene costs.”

Looking at other Asian outlets, export PVC out of China recorded drops of up to $40/ton from last week, mirroring lower Chinese import K67 prices to Türkiye this week. Lower Dalian futures coupled with plentiful availability at home weighed on China, let alone the adverse impact of the worsening real estate crisis in the country on sentiment.

Piling stocks in prompt market couple with muted derivatives

Falling import PVC offers have found a reflection in the distribution channel. Even before the lower announcements, the locally-held markets remained on a weak footing. Players’ need for cash, accumulating prompt availability amid adequate stocks both at traders and converters, and en-route cargos with cheaper costs all added to the strain.

According to the weekly average data from ChemOrbis, the local K67 market has receded by nearly 7% ($80/ton) since late August. Prices broke below the $1100/ton inc. VAT threshold on the low end by the second half of September as a lack of buying enthusiasm reinforced the pressure on distributors, let alone the persisting liquidity tightness.

Some profile manufacturers said, “PVC has been bearing the brunt of demand destruction across the board. We are covered thanks to our previous purchases for now. Most converters have not been eager to lift their stocks further amid weak price expectations and a blurry scene in downstream segments.”
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