Assessed US PVC January contracts rise 3 cents/lb on ethylene

03 February 2012 22:29  [Source: ICIS news]

HOUSTON (ICIS)--Assessed US polyvinyl chloride (PVC) contract prices for January rose on Friday by 3 cents/lb ($66/tonne, €51/tonne) from the previous month as a result of the rising cost of upstream ethylene.

The ICIS assessed price for pipe-grade PVC is 54.50–59.50 cents/lb, while the assessed price for general-purpose PVC is 57.50–61.50 cents/lb.

Several producers had announced price initiatives in late November and early December, but sentiment on whether they would be accepted by buyers was mixed.

Producers said the increase was based largely on the cost of ethylene. US ethylene contracts for January settled this week at 55.75 cents/lb, up by 1 cent/lb from December, according to market sources. The 1.8% increase was fueled by a jump in spot prices, offsetting a reduction in production costs.

One buyer said there might still be some “wiggle room” for medium-to-large buyers seeking discounts, but that smaller buyers seemed to have accepted the increase.

US demand for PVC seemed to be fairly flat, with the start of the homebuilding season still weeks away.  Home construction is a key downstream sector for PVC. However, there were export opportunities available, although those are not seen as profitable for producers.

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

($1 = €0.77)

By: Ken Fountain

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