US PVC retreats in Turkey and Egypt
In Egypt, persistently weak demand for PVC cargoes is reported, according to traders. “Overall market conditions are slow as demand is almost muted amidst EGP/USD exchange rate fluctuations. Buyers are extra cautious when it comes to making fresh purchases from the import market,” a trader commented.
Other traders in Egypt also pointed to the upcoming Ramadan, which exacerbates the lack of interest for stock replenishment.
In Turkey, lack of supplies from Europe caused PVC prices to gain ground up until three weeks ago. It was the middle of May, when players mostly concurred that demand slowed down and this fact overshadowed the ongoing supply concerns. Accordingly, US PVC offers have gradually softened since then.
Players in Turkey are now discussing whether US PVC has broken below $800/ton CIF basis. Although some players claim so, this could not be confirmed at the time of press. Some traders claim that it is an offer made from a short position while others argue that it is an adjusted price to cash from an original price with 360 days deferred payment.
Meanwhile, this threshold has already been broken in Egypt due to offers on the low end of the offer range when adjusted to cash basis.
Given the fact that the Asian PVC market has also started to retreat in line with the waning demand in India, and the Turkish and Middle Eastern markets are heading for Ramadan, demand is not expected to rebound in major spot markets. Accordingly, the downturn is expected to persist in the near term in many players’ opinion.
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