After relatively stable prices in April, the spot PVC market in Italy has risen only slightly in May. According to ChemOrbis Price Index, this week’s spot range indicates increases ranging from €10-30/ton when compared to the average April prices. Early in the month, West European producers had announced price hikes of up to €80/ton for monthly PVC contracts; however, these hike targets have not found reflection on the spot market, where more modest price hikes are sought. Central European sellers pioneered the May offers asking for a wide range of increases of €20-60/ton, which were later followed by West European sellers who are seeking rollovers to €10-20/ton increases. Accordingly, West European origins have been retaining their competitive stance against Central Europe at the low end of the ranges.
Meanwhile, overall demand in the PVC market is still not showing the long awaited recovery regardless of the high season that should have been in place by now. Indeed, buyers who were not feeling so optimistic about their business in April were even reporting their May bids at a rollover. After having seen the hike requests of sellers and the comments that they may revise their offers further up in the second half of the month, buyers now feel that they will have to come to terms with small hikes of €10-20/ton in this month’s transactions. Supporting sellers’ relatively firm stance regardless of stable ethylene costs and comfortable supplies is the ongoing expectation that demand should improve this month. Actually, buyers have reported slight improvements in their end product orders for the last two weeks albeit not on a regular basis. The persistent concerns regarding the eurozone economy are hindering a full recovery in end product markets mainly for the construction sector, in many players’ opinion. Accordingly, buyers are not actively taking part in the market making inquiries or trying to secure cargoes these days. Some even say that they will delay their purchases to June. Another reason PVC is lacking upward momentum is the sufficient availability in the region. The excess material has been finding its way to the neighboring Turkish market for quite some time at competitive prices, which proves the unspectacular state of the European PVC market. European origins have been favored by buyers in Turkey, but demand is not so vivid there either which means the country has not been able to soak up all of the excess supplies. It is mostly believed that the PVC market in Europe will fail to show a noticeable upturn unless local supplies diminish or demand shows a significant improvement. Outside pressure is not so likely to pull the market up either as it is seen since the beginning of the year that the region’s PVC market has not been responsive to the global upward pressure because of the regional oversupply, plus that upward pressure has mostly faded recently.