Europe Feb PVC up €35-40/t, smaller rise than producers hoped

19 February 2010 23:59  [Source: ICIS news]

LONDON (ICIS news)--European contracts for February polyvinyl chloride (PVC) have gained just €35-40/tonne as a result of low demand and aggressive selling, despite producers’ aiming to increase prices by €50-75/tonne ($68-103/tonne), market sources said on Friday.

In a movement similar to that seen in the Iberian PVC market at the beginning of the month, a number of manufacturers confirmed they were willing to accept a total increment of €50/tonne across both January and February. January northwest European contracts were settled with marginal increases of €10-15/tonne.

The movement left February contract prices at €965-975/tonne FD (free delivered), according to global chemical market intelligence service ICIS pricing.

“Demand has slowed down because buyers are waiting to see what happens in China [after the Lunar New Year holiday],” a major PVC manufacturer said. “There is plenty of supply and also rumours that ethylene is going to come off in March.”  

The movement appeared to be more pronounced in the pipe grade (K-67) market, where a number of sources conceded that low demand due to the ongoing adverse weather throughout Europe had made it impossible to pass more than €50/tonne through to buyers in January and February.  

A major PVC pipe converter noted: “The weather has cancelled orders and there are low prices for K-67 available from a few producers looking to shift stock.”

However, one or two producers’ resolve to push through increases of at least €50-60/tonne across all grades was as firm as ever.

A major PVC producer was adamant: “We accept €50/tonne and nothing less. There are one or two producers who offer below this level, but the majority say plus €50/tonne.”

At least one PVC profile window producer had conceded: “We do not have much space to negotiate and will probably have to accept plus €50/tonne.”

Meanwhile, a large consumer also said that it would face the full €50/tonne increase as it had achieved a rollover in January.

($1 = €0.73)

For more on PVC visit ICIS chemical intelligence
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By: Stephanie Wilson
+44 20 8652 3214

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