European April PVC contracts gain €5-20/tonne

23 April 2010 23:59  [Source: ICIS news]

LONDON (ICIS news)--European polyvinyl chloride (PVC) contract prices climbed a marginal €5-20/tonne ($7-27/tonne) for April as producers’ bids to raise prices by €40-60/tonne largely fell flat due to balanced fundamentals and lacklustre demand, industry sources confirmed on Friday.

Negotiations had been particularly tough as sellers were split in their pricing ideas. While several were said to be offering aggressively into Iberia and certain parts of northwest Europe, others were determined to push through hikes of at least €20-30/tonne, citing unsustainable margin pressure and the need to recoup losses.

Prices were assessed up by €10/tonne across much of northwest Europe to leave them pegged at €975-985/tonne FD (free delivered) Germany, according to data from global chemical market intelligence service ICIS pricing.

Iberia and Sweden saw a more marginal increment of €5/tonne due to weaker demand and abundant supply in the region, sources said.

Meanwhile, an increase of €15-20/tonne was noted in Italy, as an absence of domestic producers resulted in a tighter market, according to several sources. Indeed, a few producers pegged increases as high as €30/tonne, but there was no confirmation of this from the sell side.

Some larger hikes of €20-40/tonne were noted in the specialities markets on the back of limited availability and an upswing in demand, but for the main part pipe grade (K-67) supply remained balanced to long, sources said.

“It would be nice to get the €40-60/tonne [targeted at the beginning of the month], but unfortunately it was a dream only,” noted one PVC manufacturer.

However, with May ethylene contracts now fully confirmed at a rollover, a number of PVC producers were already beginning to nominate increases of €20-80/tonne.

For the main part, sellers were targeting hikes of €30/tonne, arguing that strengthening demand and supply constraints caused by export opportunities and a number of ongoing PVC shutdowns would support them in their aims.

However, one producer explained: “In my opinion, customers should be prepared for more or less a €20/tonne increase. Looking at the cost situation, I completely agree [with hikes of €50-80/tonne], but it is impossible to get such hikes in May.”

($1 = €0.75)

For more on PVC visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

 



By: Stephanie Wilson
+44 20 8652 3214



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