European players predict firmer PVC prices for July

26-Jun-14
Players in Europe report that they are expecting to see a fresh round of PVC increases for July on widespread anticipation of a higher ethylene settlement for the coming month, as per ChemOrbis. Buyers say that demand for their end products is a bit better while adding that they have not increased their purchases despite improvement in their end demand. With demand not expected to see a major up-tick, most players predict that the July increases will not match the full extent of the rise in the ethylene contract. Upstream, spot ethylene prices on an FD NWE basis have jumped by around €100/ton over the past month on the strength of stronger energy costs along with some supply concerns in the region. According to data from ChemOrbis Price Index, the recent increases in spot ethylene prices have sent the premium carried by spot ethylene prices over spot prices for PVC in the Italian market to their highest level of 2014. In addition to escalating ethylene prices, spot naphtha prices on a CIF NWE basis have also gained around US$40/ton over the course of June. A PVC compounder in Italy reported that they purchased West European PVC with €15/ton increases from the past month. “We are seeing good demand thanks to our export activities, but we have not increased our purchasing volumes. We expect to see another round of firming prices next month and we plan to continue purchasing only according to our needs,” the compounder stated. A West European producer reported concluding deals to Italy with €10-20/ton hikes for June. “For July, we believe that the ethylene contracts will rise by €40-60/ton and PVC prices are likely to rise by at least half the size of the ethylene hike. Some buyers may attempt to secure some additional volumes towards the end of this month in order to minimize the impact of next month’s anticipated hikes,” a producer source stated. A distributor based in Italy said that they sold Central European PVC with €10/ton hikes from June. “We expect to see a €50/ton increase in the ethylene contract owing to supply concerns within the region, which will support sellers in their attempts to raise prices. However, we feel that demand will not be that strong next month owing to the approaching summer holidays,” the distributor commented. Another distributor offering Central European materials said that they concluded deals with €15/ton hikes for June. “Our supplier experienced some problems at their plant, so our availability was limited for this month. We expect to see a firmer trend next month, although we feel that demand will not be strong enough to support any large increases,” the distributor stated. According to ChemOrbis, elsewhere in Europe, a German converter reported settling their gentlemen’s agreements for Central European PVC with a €10/ton hike after their supplier had initially asked for €15/ton. “We believe that the new ethylene contract will be settled €40/ton higher and this is will keep the outlook firm for the coming month,” the buyer reported. Another converter based in Germany said that they concluded their gentlemen’s agreements for West European PVC with €5-10/ton hikes. “Demand is not all that good, but our suppliers refused to give any ground on their prices owing to their high costs. We predict that the ethylene contract will be settled €40-60/ton higher for July and that sellers will ask for more than half of this increase on their new PVC prices,” the buyer stated.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha