Dipping by US$30, US export PVC prices sink to 2009 lows amid weak demand, feedstocks

23-Oct-15

Amid weak global and domestic PVC demand, lower crude oil prices and ample supply, US export PVC prices dropped US$30/mt on Wednesday to be assessed by Platts at US$650-660/mt FAS Houston as per sources in Platts. Sources said the negotiations were ongoing, as buying interest continued to weaken daily, traders said, with bids heard Wednesday as low as US$620/mt FAS Houston after close of assessment. The drop in domestic demand in Q4, weak ethylene feedstock pricing and declining global economic conditions applied downward pressure on export prices, despite the three production outages. The assessment is at its lowest since June 3, 2009, when levels of US$650-660/mt FAS Houston were seen. Platts data showed that prices have dropped US$215/mt from the 2015 high of US$870/mt FAS Houston seen in April. Sources said that a three-week planned turnaround at OxyVinyls Deer Park, Texas, complex is ongoing and was to be completed by the end of October. The planned TA includes a shutdown of its PVC and VCM plants, as per a company source. Additionally, Shintech was undergoing a planned outage at its Addis, Louisiana, site, in order to tie in the future 560,000 m tpa expansion, sources said. The turnaround was to be completed in early November. Company sources with knowledge of operations confirmed the outages and the restart dates. Formosa Plastics Corporation USA suffered a power upset Friday at its Point Comfort, Texas, vinyls production complex, according to a company filing with state regulators. "An underground cable shortage caused the plant to trip," the filing with the Texas Commission on Environmental Quality said. "[The] unit was shut down to minimize emissions," the filing said. A company spokesman Wednesday did not comment on the operations at the site, citing company policy. One supporting factor behind the declining US export PVC prices is declining US ethylene, sources said. Spot ethylene hovered near a 6-year low for better part of October, to be assessed Wednesday at 22 cents/lb FD USG for October delivery, on abundant supply and a weak energy complex, sources said.