Jan/Feb price hikes sought for US PVC - buyers

19 January 2010 18:10  [Source: ICIS news]

PVC prices may growHOUSTON (ICIS news)--US polyvinyl chloride (PVC) producers issued January contract price hikes, with several following the initiative with a February increase announcement, buyers said on Tuesday.

Effective 1 January, all US PVC producers are seeking 5 cents/lb ($110/tonne, €76/tonne), distributors said.

At least four major PVC suppliers issued announcements by 15 January for another 5 cents/lb in February, buyers confirmed.

One major PVC producer that had not yet issued a February announcement confirmed it was weighing the possibility of a price increase.

Most sources said the hefty price moves were supported by higher ethylene costs, but any PVC producer who would need to buy chlorine would also be grappling with ongoing high prices for this feedstock.

Chlorine prices remained lodged within the $390-410/dst (dry short ton) benchmark highs established between the second and third quarters of 2009. Some PVC buyers expected fourth-quarter price relief for the feedstock, but this did not occur, according to sources.

Chlor-alkali producer Olin declared force majeure on its chlorine, diaphragm-grade caustic soda, hydrogen and hydrogen chloride effective on Friday. The crimp on chlorine supply was expected to add support to the PVC increase price moves, sources said.

November/December ethylene contracts recently settled at plus 4 cents/lb and plus 1.75 cents/lb, respectively. Ethylene prices rose about 6.5 cents/lb between July and October, bringing the July-December overall increase to 12.25 cents/lb.

US PVC suppliers sought a 3 cents/lb November increase that experienced spotty implementation of about 1 cent/lb across November/December, but failed to push up the overall price level.

Pipe-grade PVC contracts were last assessed in a 63-65 cents/lb range, with general purpose PVC in a 67-69 cents/lb spread, according to global chemical market intelligence service ICIS pricing.

PVC uses ethylene and chlorine as main production components. Chlorine supply is largely integrated from basic chlor-alkali processes.

US PVC producers include Formosa Plastics, Georgia Gulf, Westlake Chemical and Shintech, among others.

($1 = €0.69)

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By: Judith Taylor
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