15 April 2010 21:09 [Source: ICIS news]
HOUSTON (ICIS news)--April price increases of 5 cent/lb ($110/tonne, €80/tonne) for US polyvinyl chloride (PVC) are weakening due to a lack of full following by producers, market sources said on Thursday.
Two suppliers announced 5-cent April initiatives well ahead of settlement of a 5 cent/lb March increase sought by each of the ?xml:namespace>
On Thursday, major supplier Shintech verified it was not seeking 5 cents/lb in April.
Additionally, Shintech said it had placed 2 cents/lb of its 5 cent/lb March increase under Temporary Voluntary Allowance (TVA).
Under TVA, a supplier can apply the additional amount to contracts if changing market conditions warrant.
March US PVC contracts were largely settled, moving up 3 cents/lb but blurred amid hints of concessions and discounts.
Pipe-grade PVC March contracts for small-to-medium buyers were assessed by global chemical market intelligence service ICIS pricing at 76-78 cents/lb, with general purpose at 80-82 cents/lb.
Volatility and quickly rising prices underpinned 5 cent/lb PVC increases implemented in both January and February and carried the March 5 cent/lb increase initiative into the market, sources said.
Ethylene contracts increased 12.50 cents/lb in the first quarter, moving up 6.00 cents/lb in January, 3.50 cents/lb in February and 3.00 cents/lb in March.
April spot ethylene was trading in the low 70s cents/lb, with May spot in the 60s cents/lb, forming a backwardated situation that failed to offer ongoing strength to the PVC price push.
US demand uncertainties fostered by a slow start to the spring home improvement and construction segments also added to the wobbly March contract settlements and fading support for April.
US PVC producers include Formosa Plastics,
($1 = €0.73)
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