PVC prices rise in Italy, market outlook continues to be firm

In Italy, the PVC market has been following a stable to firmer trend since the beginning of the year, as per Chemorbis. Following the €10-20/ton increases in May, sellers approached the Italian market with price hike targets as high as €50-60/ton for June, mainly triggered by recent production issues, expectations of better demand and the need to improve their margins. Price hikes have materialized this month as expected, but the firming amount has been limited, similar to last month. As a result of the pressure from competitive West European origins, Central European sellers have had to revise their hike targets down to €10-20/ton as well. This steady firming has been occurring in Italy in spite of the fact that most of the key markets across the globe are in a downward trend. For the May and June business, PVC deals were concluded lower in Asia while further declines are awaited for July offers. Likewise, import prices to Mediterranean countries such as Turkey and Egypt have been following a gradual downward trend since the beginning of the May. The lack of buy interest is blamed as the main reason behind the constant fall while the ongoing unrest about the health of the global economy is also contributing to the slowdown. Even though Italy’s PVC market was confronting the global downturn, the upward trend in the country was actually finding support from the plunging euro against the dollar in addition to regional sellers’ own justifications for higher prices. As the euro hit as low as 1.19 vs the dollar, the market level in Italy stood below the rest of the world on US dollar terms in the first half of the month. Accordingly, the market level tried to catch up with the rest of the world with this new round of increase attempts. The low parity also resulted in the inability of imports to compete in the Italian market. Even though import offers particularly from the US are offering lower prices to the rest of the global buyers, they are still not found workable in Italy, which also helped sellers raise prices for another month. This week, the panorama has changed slightly now that the parity has somewhat recovered to 1.22, naturally raising the USD based market level. At the same time, the rest of the neighboring markets have continued to go southwards this week. These factors have helped the Italian PVC market regain a premium over other markets. However, the parity is still not enabling imports to compete in the region for now. Market players also anticipate that a similar outlook of stable to a slightly firmer trend will be in place for July assuming that there will be little change in local market dynamics, particularly in the parity rate.