US PVC price proposal running out of time

02 May 2008 22:05  [Source: ICIS news]

HOUSTON (ICIS news)--The prolonged battle over a 2 cent/lb price hike for March US polyvinyl chloride (PVC) contracts must be decided next week in order for producers to get paid on time, sources said on Friday.

February US pipe-grade PVC contract prices were assessed in the 60-62 cent/lb ($1,323-1,367/tonne or €860-889/tonne) range, according to global chemical market intelligence service ICIS pricing.

As invoices for March contracts become due in the first days of May, producers will have run out of time to persuade buyers to pay the increase and may have to accept a compromise, one buyer said.

“In order to get money off their customers, they may have to accept the increase spread over March and April, or maybe take nothing in March at all,” the buyer said.

Producers said it has been difficult to push through the March price hike amid weak domestic demand. Producers said they were seeking to recover profit margins lost to rising feedstock costs.

Buyers have resisted an increase, saying they cannot pass it along to their own customers. 

“There are still ample opportunities to buy material at lower prices,” one buyer said. “I think it will be one of the producers most in need of money, such as Georgia Gulf, that breaks rank first in order to make a deal.”

Meanwhile, the majority of US PVC producers have already nominated a 4 cent/lb price hike for May contracts.

US PVC producers include Westlake, Georgia Gulf, Formosa, Shintech and Occidental Chemical.

($1.00 = €0.65)

For more on PVC visit ICIS chemical intelligence

By: Greg Holt
+1 713 525 2653

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