Players in Italy expect stable PVC prices in August

24-Jul-14

Players in the Italian market expect to see rollovers on PVC prices in August, as per ChemOrbis, in accordance with expectations that the monthly ethylene contract will settle lower as well as predictions that demand will be limited due to the summer holidays. According to data from ChemOrbis Price Index, PVC k67 prices on an FD Italy basis have been following a mostly firm trend since touching a year to date low towards the end of April. A West European producer has concluded July deals with €25-30/ton increases after initially asking for price hikes of €40/ton. “For August, we believe that the ethylene contract will settle €10-30/ton lower and for this reason, we think that the market will not be able to absorb any additional increases next month. In addition, we expect to see some softening in demand next month and this will exacerbate downward pressure stemming from lower feedstock costs,” a producer source commented. A compounder reported purchasing West European PVC with €25-30/ton increases from June. “Demand for our end products was satisfactory in July. We believe that prices will remain mostly stable in August as sellers will be reluctant to give any ground on their prices, while we believe that the market will start to see some price relief in September,” the compounder stated. A distributor reported selling Central European PVC with €25/ton hikes from June. “Most buyers are covered after sourcing some import cargoes. We predict there will be a stable trend for both August and September,” the distributor reported. According to ChemOrbis, Italian players report that they have been seeing more import offers recently, which some players took to be a confirmation of globally softening PVC demand. A pipe manufacturer stated that they purchased Mexican PVC with a €20/ton increase over the past month while adding that they paid €20-30/ton hikes on their West and Central European cargoes. “August will be a short month in terms of working days and we think that prices are likely to rollover,” the buyer stated. A trader reported concluding a deal for Egyptian PVC €30/ton above last month. “Sluggish demand during August will keep prices stable next month,” the trader reported. American offers also resurfaced after an extended period of absence in Italy, with players commenting that American PVC had been scarce recently as US prices were uncompetitive in Italy.