Rising PVC exports may not shield US capacity - Chemsystems

26 January 2010 22:42  [Source: ICIS news]

HOUSTON (ICIS news)--North American polyvinyl chloride (PVC) exports will continue to rise in 2010, but the increase in shipments may not be enough to forestall further shutdowns, chemical consultancy Chemsystems said on Tuesday.

"Exports from North America will peak in 2010, driven higher by a combination of large capacity additions and declining domestic demand," Chemsystems said in a summary of a new report on the vinyls sector.

"If the domestic construction sector fails to show signs of recovery, however, more capacity could be rationalised to avoid this exposure to the export market at the bottom of the business cycle," the summary said.

According to the latest data from the International Trade Commission (ITC), US PVC exports were 202,438 tonnes in November, more than double the 91,859 tonnes a year earlier.

For the first 11 months of 2009, US PVC exports were up 54% from the year-earlier period at 1.914m tonnes, the ITC said.

US PVC demand has been weak because of the severe downturn in the housing and construction markets, which account for three-quarters of demand.

An executive with US chlor-alkali producer Olin said on Tuesday the industry may have to shut down plants to match supply with demand.

John McIntosh, president of Olin's chlor-alkali division, said on an conference call with analysts that 12% of US capacity was shut down during the last downturn.

Other US chlor-alkali producers include Dow Chemical, Occidental Chemical, Formosa Plastics, Shintech, Georgia Gulf, Bayer and PPG Industries.

For more on PVC visit ICIS chemical intelligence 
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By: Stephen Burns
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