US PVC players clash on whether July contracts stay flat or drop

29 July 2011 19:30  [Source: ICIS news]

A Georgia Gulf plantHOUSTON (ICIS)--US polyvinyl chloride (PVC) market participants disagreed on the direction of July contract settlements this week, as producers aimed to maintain flat pricing while buyers sought a price drop, sources said on Friday.

Major PVC buyers are seeking a 1 cent/lb ($22/tonne, €15/tonne) decline in the price for July, citing the June ethylene contract that settled down by 1.75 cents/lb.

However, at least two PVC producers said July negotiations were ongoing.

One PVC producer said a recent increase in ethylene spot prices is a compelling reason to support a rollover.

“We strongly believe it will settle flat,” the source said.

A PVC buyer said the recent pushes by producers in March, April and May to seek successive price increases – a cumulative 11 cents/lb – are all the domestic market can handle, especially as demand has remained sluggish.

Some US PVC producers initially announced a 5 cent/lb increase for June, but when a lone producer abstained from making a June announcement and delayed the increase to July, June contracts settled on a rollover.

US June PVC contract prices are 55.9–60.5 cents/lb for pipe and 57.5–62.5 cents/lb for general purpose, as assessed by ICIS.

This week, the producer that was out with a 5 cent/lb July increase modified the price hike to 2 cents/lb for August and 3 cents/lb for September.

Other producers also were out with a similar August-September pricing announcements.

At least one producer also emerged with an additional 2 cent/lb increase for October.

The July ethylene contract price has not yet settled. The ethylene contract price typically settles in the first week of the next month.

Major US PVC producers include Shintech, Formosa Plastics, Westlake, Occidental Chemical (OxyChem) and Georgia Gulf.

 ($1 = €0.70)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
For more on PVC visit ICIS chemical intelligence


By: Ruth Liao
+1 713 525 2637



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