PVC continues to trade below global markets in Italy

23-Apr-10

Italy’s PVC market has been following a stable to slightly firmer trend in March and April. As per Chemorbis, sellers ha to cover tempted to cover higher ethylene costs with modest price hikes. Others who sought larger hikes, have had to down revise their hike targets later in the month in line with the market level. Meanwhile, buyers are bidding for rollovers due to comfortable availability and the lack of a revival in demand in the region due to the fact that the long expected high season is yet to make an impact on end product markets. Accordingly, buyers meeting their minimum requirements have been in quest of attractive prices at the low end of the ranges. This month, converters have tried to secure cargoes below €800/ton while the overall range is reported at €750-810/ton for k67 or US$1006-1087/ton on USD terms. Import offers to the Italian market have also been found unworkable for some time. Offers for North and South American cargoes are reported at €850-900/ton DDP North Italy, 90 days deferred payment (US$1045-1095/ton CFR after deducting estimated clearance costs and freight back to the port and customs duty if applicable) As buyers are able to find much lower prices for promptly available cargoes in the local market, there is almost no interest for imports. US offers in the neighboring markets stand at US$1020-1040/ton CFR Egypt/Turkey, the low end of the offer range to Italy is in line with these markets, showing that there is upward pressure from imports. European PVC k67 offers in Turkey are reported this week at US$1080-1090/ton on CFR, cash terms. When converted to the euro, they correspond to €805-813/ton, which can be considered high while there are offers as low as €750/ton in Italy’s spot market, also showing that PVC prices in Italy are trading below the other global markets. Other markets show a similar trend with the overall import PVC level in China, Southeast Asian markets and Egypt being above the low end of Italy’s domestic range. Local supply-demand dynamics are depressing prices in the Italian market. Players are widely anticipating a similar outlook for May with supplies remaining comfortable and demand still showing lack of a rebound. Unless local supplies are soaked up and the high season hits the end product markets, a stable to slightly firmer trend is foreseen for May with prices continuing to trade below the global markets.