Venezuelan PVC supply rises after repairs at Pequiven plant

16 June 2011 22:04  [Source: ICIS news]

HOUSTON (ICIS)--Supplies rose in the Venezuelan polyvinyl chloride (PVC) market after production issues at Pequiven were resolved in early June, a local source said on Thursday.

However, demand has also risen, and the overall market is balanced.

Venezuelan PVC processors noted concern over availability when one of five reactors at domestic PVC maker Pequiven’s plant stopped operating in May for approximately 30 days. All five reactors are now running normally, the source said.

Clouding resin availability issues, the Venezuelan government is focusing on subsidised, low-cost petrocasas, which would have priority in obtaining PVC products. This emphasis appeared to be directing PVC resin and products away from the private sector, according to market participants.

Petrocasas would be built in Venezuela for domestic consumption as well as for export to Cuba, Bolivia, Nicaragua and Guatemala.

Domestic resin is currently available for applications in petrocasas, as well as for the private sector. However, once the petrocasas project accelerates, perhaps by year’s end, resin produced by Pequiven might elude the private sector, which would have to import resin.

The Venezuelan government removed import duties from all construction materials, including pipes and fittings, to benefit petrocasas production, but not from imports of PVC resin.

Import duties are currently 15% on resin from the US and Asia.

These conditions worried Venezuela processors that would be placed in a difficult position, importing duty-charged resin and competing against imports of duty-free pipes and fittings.

PVC processors in Venezuela, apprehensive about these changing conditions and uncertain market forecasts, accelerated purchases of Pequiven’s resin, according to industry participants.

As a result, the currently well-supplied Venezuelan PVC market that was assessed as long between 30-60 days ago on depressed construction activity became balanced in June.

For more on PVC visit ICIS chemical intelligence

By: Ron Coifman
+1 713 525 2653

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