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Will European PVC uptrend be sustained moving into March?

  • 22/02/2018 (08:03)
In Europe, February PVC business has been wrapped up with small increases of €10-15/ton, while the entire ethylene upsurge of €20/ton passed on deals only in a few cases. Now, players are casting an opinion on the direction of the market for March in the face of weaker costs and balanced supply-demand for PVC.

In Italy, demand was reported to be in balance with regular supplies. A buyer who paid €10/ton increases for European material reported, “We purchased regular amounts according to our production needs. Plus, we are receiving cargoes from the US and Egypt, which were ordered back in December and January at prices well below €900/ton.”

The March PVC outlook seems to be stuck between costs and sellers’ intention to recover their margins as naphtha losses have already triggered expectations for a stable outcome in March ethylene contracts. However, sellers in quest of margin recovery seem to be more prone to ask for small increases in case demand remains supportive in March. They believe that better demand might help reduce supply levels along with the lack of imports from the US.

A buyer from the Netherlands commented, “We have purchased some extra stocks this month. In March, PVC producers are likely to ask for €5-10/ton hikes even if ethylene settles at a rollover.”

A source from a South European producer said, “Demand is rather good and supplies are normal. As for March, we heard market expectations of €10-20/ton increases in the next ethylene contracts; however, we expect a stable to slightly higher monomer outcome. PVC market conditions are healthy, which may support a new round of small PVC hikes in March.”

A major market player argued, “Demand is improving while supplies are regular. This might encourage PVC sellers to try renewed hikes for March. However, PVC prices may remain unchanged if ethylene settles with rollovers.”
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