European PVC sellers target rollovers for Dec despite unsupportive market conditions

A steady to slightly firmer trend prevailed in the regional PVC markets during November. Sellers were not able to achieve the 50% cost pass-through from ethylene in all positions given poor fundamentals. Hence, increases between €5/ton and €15/ton passed on deals while buyers also managed to pay stable prices in some cases.

Now that the year-end is approaching, players are questioning the feasibility of a stable trend in December despite a potential softening in the next monomer settlement and lingering weak market conditions.

Suppliers struggle to protect margins in November

Ongoing profitability issues have pushed producers to seek increases of €15/ton this month as initial larger hike attempts proved to be unworkable. However, sluggish buying appetite coupled with comfortable availability despite a few plant outages and maintenance shutdowns within the bloc prevented suppliers from reflecting the half of the monomer hike across the board.

Accordingly, apart from €15/ton hikes that are enough to protect producer margins, prices also posted smaller gains of €5-10/ton as the month wore on. In a few cases, converters managed to pay rollovers over October, especially in Italy, where the market is predominantly spot-based and prices stand at higher levels compared to those in Western Europe.

PVC market likely to open December on a stable note

Although the impending ethylene contract is projected to close with small drops, producers intend to keep their prices steady next month, in an attempt to recoup some margins as they are near to the break-even point or even in negative territory. Suppliers consider current resin prices unprofitable with respect to their production costs and target to sell at higher levels. Yet, it is unusual to see an upturn in the PVC market in December, especially this year amid the lack of support from supply-demand dynamics. As a result, producers are expected to focus on maintaining stability in the following days.

As a side note, sellers also aim to avoid downward corrections in starting price levels of 2025 contracts due to the aforementioned factors. Moreover, the awaited imposition of definitive anti-dumping duties on US and Egyptian PVC early next year is likely to shift buyers’ focus toward local resin, leading to increasing purchasing volumes for European material.

Will sellers be able to prevent drops?

Participants expect converters to show resistance to potential rollover attempts, citing the possibly softer monomer settlement for December and weak fundamentals. On top of this, the limited number of working days owing to Christmas holidays is supposed to limit purchasing activities, with buyers trying to secure their restricted needs at the cheapest price. Consequently, sellers might be forced to concede to slight discounts during negotiations also given their year-end book closures.

Buyers are supposed to ask for some reductions on the starting levels for next year’s contract prices amid the unpromising demand outlook for the coming months. In that case, the flexibility of suppliers’ pricing policies may depend on how they intend to improve the profitability of their PVC business as capturing larger contract quantities for 2025 might be an option.