West European PVC players project further drops for February
A West European PVC producer concluded their January deals with decreases of €50/ton both in the spot and contract markets. A producer source said, “Buyers are limiting their purchases to a needs only basis due to their weak expectations for the upcoming month so demand has not been regular. For February, we think that ethylene contracts may settle with decreases from €70/ton to €100/ton.”
In Germany, a distributor reported concluding some spot deals €50/ton below last month. According to the seller, the outlook is weak for February as prices might remain under downward pressure from the cost side.
A few converters started to settle their January PVC contracts with decreases from €50/ton to €70/ton with different regional suppliers. The buyers stated that demand is calm in the construction sector and commented that PVC prices might decline further by €30-40/ton in February. A window profile manufacturer added, “We closed our January gentlemen’s agreements €55-65/ton below last month. We think that ethylene contracts might settle €25-35/ton lower for February so we expect to see smaller reductions for PVC with respect to this month.”
The overall expectations are calling for a variety of decreases from €50/ton to €100/ton for the awaited ethylene contracts. Spot ethylene prices have dropped by around €90/ton from early January levels to be quoted at €685/ton FD NWE this week. Spot naphtha prices, on the other hand, exceeded the $400/ton threshold again following their recent gains and they are suggesting a minor drop of over $10/ton compared to the beginning of the month which might put a cap on bearish expectations to some extent unless the upstream markets lose further ground ahead of February.
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