High PVC prices in Latin America should soften in July

09 May 2011 18:16  [Source: ICIS news]

SAO PAULO (ICIS)--Polyvinyl chloride (PVC) prices in Latin America will likely remain firm through June on short global supply, but should start easing in July when new capacity comes on stream in China, participants said on the sidelines of the Brasilplast trade fair and conference.

PVC demand in Latin America is strong from all key sectors, such as pipe, cable, and shoes. However, processors are purchasing resin on a hand-to-mouth basis on concerns that prices could suddenly drop, as happened in 2008, the sources said.

New PVC capacity should soon start up in China and lessen the nation's appetite for resin imports.

It remains unclear whether the expected price decline for July would take effect as a strong, sudden drop or as a gradual softening, sources said.

The Americas, particularly the US and Mexico, have been aggressively exporting to China, Turkey and Europe. Japan has also become a  target of US exports in the aftermath of the earthquake and tsunami.

These market dynamics are currently keeping PVC availability in Latin America tight and prices high, the sources said.

Meanwhile, strong exports from the Americas are ongoing, maintaining balanced supply and demand in the US - despite a weak domestic housing sector.

Brasilplast is a major fair for the plastics industry in South America, organised by Reed Exhibitions Alcantara Machado.

Brasilplast runs 9-13 May.

For more on PVC visit ICIS chemical intelligence

By: Ron Coifman
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