by Merve Madakbaşı – mmadakbasi@chemorbis.com
PVC markets of Italy and Northwest Europe have returned from holidays on a firm footing on the heels of still-tight supplies. Activity has been buoyant despite holidays, while PVC expectations for September have started to be expressed by regional players. Meanwhile, increases of €30-40/ton passed through August deals this week.
Italy’s spot PVC K67 market was assessed at €1550-1650/ton FD, 60 days this week. In Northwest Europe, offers were pegged at €1480-1590/ton with the same terms.
Availability has yet to improve much amid turnarounds
Whilst several producers have been conducting planned maintenance at their PVC plants since August started, availability in Europe has continued to fall short of demand. Indeed, reduced export allocations from the region to nearby Turkey pushed notional prices up further ahead of the new month.
A West European supplier commented, “We expect buying appetite to remain vivid in almost all sectors also in the short and medium terms considering converters’ full order books. Regarding PVC availability, the maintenance shutdowns planned at some regional producers’ side together with the force majeures still in place in Europe are likely to keep local supply tight.”
Record-high prices kept August hikes in check
Although sellers attempted for €50/ton hikes in a few cases earlier in August, most transactions were wrapped up with €30-40/ton gains from July. “Deals did not reflect the entire increase in the August ethylene settlement as the market already pointed to record-high levels,” noted players.
Most consumers reported receiving satisfactory end product orders for September and even October. A few of them were able to build some resin stocks, owing to their reduced operating rates during holidays. On the other side of the coin, vivid PVC demand has prevented producers from stocking up since late Q2.
Projections for Sept call for a steady to firm trend
As for the coming term, expectations have started to take a shape between various factors. The market will probably continue to be underpinned by an acute PVC tightness in September.
On top of supply constraints that have already been in place in the spot markets of Europe, logistic mishaps and a strong trend across the board may hinder imports from Asia and the US for another month. This is also considering the fact that demand from the key İndian market. will be supported by post-Monsoon activity moving into autumn.
Nonetheless, expectations center on a stable to slightly firmer trend. The fact that prices have already been overrated for some time now with multi-year high premiums over other PVC outlets may curtail visible gains on prices.
On the cost side, meanwhile, September ethylene contracts are expected to settle slightly softer. This projection adds to expectations that the longest rising streak ever may take a break in Europe, particularly if offline plants resume operations.
Spot ethylene prices have declined by around $184/ton (€156/ton) on an FD NWE basis since the beginning of August, according to ChemOrbis Price Wizard. Naphtha on a CIF NWE basis has lost around $33/ton in the same period.
