PVC prices indicate a firm trend in Europe, and despite slow demand in Asia due to the Chinese New Year, expectations regarding the post-holiday period remain firm, as per Chemorbis.
In Italy, January PVC business has been concluded with €30-50/ton increases for spot and gentlemen’s agreement deals. Currently, February transactions are aimed for conclusion with up to €30/ton increases in the spot market while producers are reportedly seeking up to €60/ton increases for gentlemen’s agreements as they complain about not being able to cover their margins for the past months amid rising costs.
Ethylene contracts for February settled with €25/ton increases in Europe following even higher hikes of €160/ton issued between November and January. Meanwhile, spot ethylene prices gained €45/ton on FD NWE basis since the beginning of January. Producers aim to obtain at least half of the ethylene hikes considering the amount used in their production. Pointing to the higher upstream costs, some spot sellers even pronounce higher prices for March, too, as they want to recoup their margins. Considering the sellers’ firm attitude, some medium to large scaled buyers have already started to build up stocks to be prepared. Meanwhile, small sized converters still do not purchase more than their urgent needs as they hope to see advantageous import offers in the days ahead.
In China, prior to the Chinese New Year holiday, import sellers had already concluded most of their February PVC deals with US$10-40/ton increases over January for mainstream Asian origins. The rest of February deals are expected to settle at or close to the current levels while sellers are reluctant to offer discounts prior to the holiday as they expect firmer market conditions following the holiday when taking the firm oil prices and approaching high season for the construction sector into account. Looking at Southeast Asia, the PVC market portrayed a firm outlook despite the fact that the Chinese New Year dampened the buying interest in the region during January and early February. Yet, sellers agree that the overall demand still performed better in January when compared with December. Nowadays, the PVC market is quiet due to the holiday but some early March sell ideas have already emerged. A major Thai producer reported aiming for $20-30/ton increases on their March offers on CIF SEA, cash basis while they target the same amount of increase on their March export offers when compared to their most recent February done deal level. On another note, an Indonesian producer’s goal is to lift their import offers by $30-40/ton on CIF, cash basis for the next month.