24 February 2012 11:56 [Source: ICIS news]
LONDON (ICIS)--Supply constraints at French specialty chemical firm Arkema and Belgian PVC producer SolVin have reduced inventories and increased tightness in the European polyvinyl chloride (PVC) market, industry sources said on Friday.
"PVC stocks have fallen significantly,” a northwest European producer said.
“Almost 70,000 tonnes of stock have been removed from the industry, resulting in a tight market this month,” it added
The markets are particularly tight for grades K70 and K57, the producer said.
Despite supply constraints, several buyers said they have not experienced major difficulties in purchasing the product they need from alternative sources.
Arkema declared force majeure on PVC production at its facility in Berre, southern France, as freezing temperatures led to the shutdown of the vinyl chloride (VCM) plant at the same location.
The force majeure is still in place, pending the restart of the VCM plant.
The company could not specify when the VCM plant will be restarted and the force majeure lifted.
Both plants have now recovered normal operating rates and the force majeure – which affected production of grades K70 and K57 at SolVin's Tavaux facility and all commodity grades at the Jemeppe site – has been lifted.
However, some orders are being postponed because of low stocks and it will take several days before PVC supplies can return to normal.
Low inventory levels and strong demand have forced other producers to implement allocation on PVC supplies.
Shin-Etsu’s PVC supplies are on allocation because of “extremely high levels of demand”, a company source said.
The allocation will remain in place throughout March and April, when production at the company’s PVC facility will be reduced for four weeks of maintenance.
Vinnolit is also on allocation because of high demand and low inventories, a company source said.
Further tightness is expected as several maintenance shutdowns are planned for March and April, coinciding with the start of the PVC and construction season.
($1 = €0.75)
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