US PVC regaining competitiveness in global markets

17-Sep-10
Lower offers for American PVC emerged in several major global markets this week, while players in other markets anticipate reduced offers in the coming weeks. As per Chemorbis, players attributed the downward movement in US PVC prices to a desire to increase export sales in the face of persistently poor demand from the domestic housing sector. Chinese buyers, who had been purchasing large volumes of American PVC for most of the year, shifted their attention to nearby sources last month as they did not find US offers to be competitive with mainstream producers. Although October offers for US PVC were announced with increases in China, American origins are beginning to regain their competitiveness with Asian origins as American offers rose US$10/ton for October while offers for Asian origins were up US$30/ton from September. This week in Italy, October offers for American PVC were €15/ton below the initial October offers for this origin reported at the beginning of September. Earlier offers reported for US origins did not meet with much interest from Italian buyers as they were not considered competitive vs prevailing offer levels for domestic cargoes. Over the past week, offers for American origins have shifted downward while local offers have risen, hence buyers report that offers for American origins are beginning to be more competitive when compared with offers for local material. In India, a distributor reported receiving an offer for American PVC at prices US$30/ton below the most recent offers. The distributor said that they are willing to accept the offer they received for American origin as they find it more attractive than the offers they received for Northeast Asian materials. However, the distributor commented that they are not willing to make any fresh purchases until they search out the market for some additional offers. Traders in Egypt report that they have reduced their offers for American PVC by around US$20-40/ton on a CIF Alexandria, cash equivalent basis, this week in response to poor demand from Egyptian buyers following the Ramadan holidays, with converters in Egypt saying that they do not expect demand to witness any noticeable improvement over the near term. With demand expected to remain soft over the near term, players are anticipating further price declines in the days ahead. In the nearby Turkish market, offers for American PVC were reported US$5-15/ton lower on a CFR Turkey, cash equivalent basis this week. Traders in Turkey commented that they are expecting further reductions in offers for US origins in the coming weeks due to lower offers for this origin in the Egyptian and Italian markets as well as the fact that buying interest inside Turkey remains sluggish following the Ramadan holidays.
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