Mediterranean markets see US PVC offers dip below US$1000

15-Sep-14

In Mediterranean markets, including Italy, Turkey and Egypt, import US PVC prices dipped below the US$1000/ton threshold mostly on the back of muted global PVC demand, as per ChemOrbis. In Turkey, a converter who received an offer slightly below the US$1000/ton threshold for US PVC k67-68 noted that they obtained this price towards the end of last week. However, the buyer, expecting further softening on prices, does not want to make fresh purchases at the moment. A trader reported, “We previously had sold out our cargoes but we do not want to commit to fresh PVC purchases just yet as we anticipate more prices emerging below the $1000/ton threshold in the days ahead since PVC demand is very thin.” Another converter commented, “We have not heard any US PVC offers below US$1000/ton yet, but to be frank, we do not think that it is surprising to hear that level when considering the currently slow business conditions and the further expected slowdown in October and November, in line with the year end and book closures.” In Egypt, too, players reported offers slightly below US$1000/ton for US PVC k67-68 during this past week. Already poor PVC demand, which has been hampered further by lower operating rates in the country, pushed traders to concede to further decreases on their import levels. A buyer who purchased at the low end of the import US range commented, “Cash flow issues remain in the market and therefore, discounts of up to $20/ton are achievable.” Other players also point to the approaching Eid holiday and pronounce their expectations of slowing buying interest. In Italy, a PVC compound manufacturer reported receiving a Mexican PVC k64-65 offer. The offer comes to just below $1000/ton on US dollar and CIF equivalent basis. “The PVC market is stagnant and we anticipate a stable to softer trend for October,” he remarked. According to ChemOrbis, although PVC demand is weak in many of the export destinations for US PVC, upstream spot ethylene prices gained around $60/ton on the week, towards the end of last week. Meanwhile, in the US domestic PVC market, an initial October price was nominated with around $65/ton increases. These bullish developments inside the US may put a cap on the expected PVC decreases.