Polymers: PVC price targets fall short of targeted increase

07 February 2011 00:00  [Source: ICB]

Europe PVC falls short on targeted price increase

Polyvinyl chloride (PVC) producers in Europe fell short in their bid to achieve targeted increases of €50-80/tonne ($60-108/tonne) with buyers in January. Prices ­instead settled at a more marginal rise of €30-50/tonne.

European buyers didn't believe that producer bids to raise prices were justified, taking into account low demand and ample availability of material. At least one buyer said it could not pass on increases of even €20/tonne ($27/tonne) or more to its customers.

Deals in Northwest Europe were settled with increases of €30-40/tonne. German prices were thus at €1,100-1,130/tonne free delivered (FD) on a gross basis, as assessed by ICIS.

HIGHER INCREASE
Increases in Iberia were concluded at a higher increase of €50/tonne, leaving gross prices at €1,250-1,040/tonne FD.

Not only were ample availability and low demand limiting factors to price hikes, but aggressive competition was also cited as a major factor weighing on market sentiment.

Meanwhile in US PVC, contracts are likely headed towards a rollover from November prices. November contracts were assessed by ICIS at 74-76 cents/lb ($1,631-1,676/tonne, €1,207-1,240/tonne) delivered (DEL) for pipe-grade resin.

General-purpose resin contracts were assessed at 78-80 cents/lb DEL. November contracts for both grades were ­assessed at 2 cents/lb higher than previous levels.

There were some 3 cent/lb ­increases proposed for December, but these were pushed to January by some suppliers.

However, the move left behind some mixed market sentiment about actual implemenation for December and, potentially, for January.

Meanwhile, in Mexico, PVC prices are stable, despite a tight import spot market. Contract volumes are still being shipped on schedule.

The only local PVC producer, Mexichem, is said to be keeping resin prices unchanged into February. In comparison, Occidental Chemical is attempting to raise its PVC prices in Mexico by $40/tonne (€30/tonne) on short supply, while Georgia Gulf had no spot material available for Mexico spot business in February.

Additional reporting by Ruth Liao and Ron Coifman in Houston

Author: Feliza Mirasol, Stephanie Wilson, Ruth Liao and Ron Coifman

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