Türkiye’s PVC market seems prone to further softening in August

Import K67 prices hit their lowest levels in almost two months in July, according to ChemOrbis data, as sellers’ earlier attempts to lift the market failed. With lackluster demand remaining at center stage and global indicators not looking promising — except for a firm outlook in Europe — Turkish players expect prices to soften further in August.

Subdued global demand sends US PVC to low-$800s/ton CIF

US K67 prices added to their losses as the end of July approached, with offers nearing the low $800s/ton for late August or September shipments this week. Needless to say, the latest pricing policies were fueled by $70/ton lower prices from a Taiwanese major to India and falling domestic offers in this key PVC market.

Adding to the scene was the fading impact from Hurricane Beryl that occurred earlier in July. Some US PVC plants returned from precautionary shutdowns at a time when ex-USG cargos into Europe were capped by a series of measures, potentially leading to increased volumes to Türkiye. Overall, the dutiable PVC K67 range was assessed $20-40/ton lower at $820-850/ton CIF Türkiye, cash week over week.

Players expect European offers to see new discounts

The duty-free K67 range was assessed steady to $20/ton lower at $840-870/ton CIF, cash from last week, consisting of Egyptian and European origins. Traders repeated their complaints about lackluster demand from consumers. One of them opined, ’The previous bullish trend caused manufacturers to buy more than their needs since late May. Buyers had hoped to see a recovery in downstream demand, while climbing freight rates and a strong rally in Asia made them think that prices would not turn down anytime soon.’

Looking ahead, the prevailing supply-demand dynamics suggest a weak outlook for August, and prices may continue to decline. This projection takes into account the gloomy demand outlook in derivative markets amid high end-product inventories in Türkiye and high interest rates.

Having obtained rollovers to €10-20/ton hikes in July deals prior to the long summer holidays, European PVC makers plan to maintain their firm stance in their markets, counting on higher expected ethylene settlements for August. To achieve any price increases within the bloc, they may prefer to boost their exports to nearby Türkiye, as some players suggest, which would add to sales pressure on US producers in the coming term. At the same time, Türkiye’s modest netbacks to Asian outlets may help keep price drops in check.

An agent of a European producer affirmed that lower prices in Türkiye are due to stalled downstream markets. “We plan to adopt a firmer stance in Europe, while offers to Türkiye may see additional, albeit modest, discounts due to margin concerns. We have noticed aggressive Egyptian PVC offers in Africa, which points to stiff competition nowadays.”

South Korean PVC re-emerges as freight rally subsides

In the meantime, the non-dutiable South Korean PVC K67 reappeared after a period of absence at $850-870/ton CIF, with little buying interest in these cargos at the time of writing.

“Extreme ocean container prices once caused South Korean sources to issue massive hikes, with offers as high as $1100/ton CIF, or withdraw their prices from Türkiye. Nonetheless, sellers were able to offer more competitive prices when they could secure relatively workable freight rates,” a trader said. The re-emergence of these cargos also reflected subdued purchases by Asian buyers.