US PVC market reaches split August-September settlement

21 September 2009 21:53  [Source: ICIS news]

HOUSTON (ICIS news)--US polyvinyl chloride (PVC) contracts finished in a split settlement between August and September, buyers said on Monday.

Buyers confirmed August contracts settled up by 1.5 cents/lb ($33/tonne, €22/tonne) and September rose by the same amount, splitting the original 3 cents/lb sought by suppliers in August.

The 3 cents/lb August/September settlement would bring pipe-grade PVC resin contracts to a 61.5-63.5 cents/lb range, with general purpose material going to a 65.5-67.5 cents/lb spread, according to global chemical market intelligence service ICIS pricing.

Buyers firmly resisted the original 3 cents/lb August price move, largely because of weak PVC demand fostered by struggling US housing and municipal construction segments, sources said.

Resistance to the proposed August hike stalled the September price move, eventually resulting in the August/September split.

At least one supplier had also proposed a 2 cent/lb September price initiative, but postponed it with a temporary voluntary allowance (TVA), which would be activated only if market conditions significantly changed, sources said. The supplier originally sought the 2 cent/lb September increase on the back of higher chlorine costs.  

US PVC producers include Formosa Plastics, Georgia Gulf, Occidental Chemical, Shintech and others. US PVC buyers include most municipal pipe and construction companies.

($1 = €0.68)

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By: Judith Taylor
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