Demand for US PVC remains muted in main export destinations

American PVC has been facing weak demand across the globe with players reporting muted interest in Turkey, China and Egypt, which are main export destinations for this origin, as per ChemOrbis. In fact, this is despite healthy domestic demand as well as ongoing supply constraints in the US, which, according to some players, may keep export allocations out of the country limited throughout April. Even though export prices out of the US held pretty much flat recently in global markets, some players feel that the prevailing offers may eventually be adjusted down since lack of strong demand will outpace supply constraints. In China, players comment that they are generally expecting to see some downward movement in prices for April owing to unsatisfactory demand. “Weak local PVC prices and slow demand still create some downward pressure on import prices. So we expect to see lower prices from Taiwan. American PVC is still very limited to China. There are rumors about softer American prices whereas our supplier is yet to reveal new offers for April so far,” said a trader. A second trader concurred, “There is a market talk about a softening for American prices but we didn’t confirm this.” Last week, a trader had commented, “We have not received fresh offers for American PVC and we will purchase a larger part of our allocation from Taiwan next month if American prices remain close to par with Taiwanese origins." A Taiwanese supplier highlighted that supply from both the US and Japan is very tight. “This is because an earthquake in Japan may force naphtha crackers to stop production for at least 10 days. Tosoh shut its plant due to insufficient ethylene supply, while a fire at Kaneka is affecting its upstream production. Plus, Japan is having the peak season for maintenance shutdowns during the March-May period. In the US, Chevron’s pipeline from Texas to Louisiana will be completed by June while a turnaround at Shintech may last longer than planned,” he stated. In US plant news, Shintech’s scheduled shutdown at its Texas PVC plant is expected to continue until next week, according to market sources. Maintenance at the Freeport plant started earlier in March. Axiall’s VCM force majeure from its Lake Charles, Louisiana plant reportedly remains in place. In Turkey, more PVC players think that PVC prices may soften under pressure from persistently slow demand ahead of the local elections at the end of March. Some distributors reported that both buyers and resellers are reluctant to engage in new purchases given the risky fluctuation of the local currency against the American dollar. American PVC offers mostly held stable week over week while even sellers offering on the low ends failed to grab interest from buyers. A trader noted, “For the US cargoes, weak demand does not allow prices to increase in Turkey although American sellers are relaxed about their export prices as they report seeing good demand in their local market given the healthy construction sector in that country.” Another trader reiterated the American producers’ indifference to the weakness of export demand due to their healthy domestic demand and tight supplies; however, others believe that globally poor demand will outweigh the domestic situation and they will have to come down. In Egypt, players commented that weak demand in export destinations like China, Turkey and Egypt may keep import American PVC from rising further, although US sellers reported not being under any sales pressure given the good demand from their local market. According to ChemOrbis, looking upstream, spot ethylene prices in the US were down 1 cent/lb (US$22/ton) on FD USG basis from last week while they held steady from the beginning of March. February ethylene contracts settled down 0.75 cents/lb (US$17/ton) from January in early March.