Europe May PVC contracts roll over
25 May 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--May contract price discussions in the European polyvinyl chloride (PVC) market have settled with a rollover, most producers and buyers said on Friday.
At the beginning of May, European producers were optimistic about another increase, following three months of outage-related tightness and price hikes.
Three producers announced target increases of up to €50/tonne ($62.5/tonne) aimed at offsetting high production costs and recovering the margins lost during the destocking cycle in the second half of 2011.
On the other hand, buyers were seeking a decrease because of lower feedstock costs – the European ethylene contract price for May settled down by €20/tonne – and the poor outlook of the European construction industry.
Market players confirmed small increases in early May, driven by a small improvement in demand and the start of the downstream construction season.
However, anticipation of lower feedstock costs – the June ethylene contract price settled down by €120/tonne – sent buyers to the sidelines of the market during the second half of May and forced producers to cut production to offset low demand, with operating rates between 70-80% reported by some.
“No one [would] consider any further business in May. Everyone was waiting for June [ethylene contract price] to settle,” a producer said.
PVC prices settled by and large with a rollover, although some increases and decreases were also confirmed by market players.
“A rollover was the maximum price you could get,” a producer said. He added that lower ethylene and PVC prices were unlikely to drive greater demand for PVC.
“As soon as you enter a drop in feedstock prices, everyone will wait for further decreases,” the producer said.
($1 = €0.80)
Follow Abache Abreu on Twitter
By: Abache Abreu
+44 2086523214
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
| ICIS news FREE TRIAL |
| Get access to breaking chemical news as it happens. |
| ICIS Global Petrochemical Index (IPEX) |
| ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index |
Related Articles
- 08 Jun 12 21:49 INSIGHT: US housing recovery bodes well for PVC market
- 01 Jun 12 04:13 China’s Xinjiang Xiangyun to build PVC plant by May 2013
- 28 May 12 10:20 China’s Hunan Zhuzhou Chemical shuts PVC plant for maintenance
- 28 May 12 09:16 China’s Suzhou Huasu Plastics shuts PVC unit for maintenance
- 25 May 12 12:32 Solvay completes sale of 50% stake in plastic pipe systems supplier
- 25 May 12 08:32 China's April ethylene output down 6.4% year on year
- 24 May 12 22:59 Shintech proposes $60/dst hike for US caustic soda
- 04 May 12 13:30 Europe May PVC contract prices to roll over or increase
- 20 Apr 12 23:59 Europe April PVC contract prices settle up by €45-60/tonne
Latest News
- 19 Jun 13 14:43 Europe PP imports up in March, but still below average
- 19 Jun 13 14:29 BASF restricts TDI output at Schwarzheide for technical reasons
- 19 Jun 13 14:23 Vietnam’s PV Oil awards a tender offering two August Chim Sao cargoes
- 19 Jun 13 14:10 ExxonMobil’s Imperial Oil to convert Canada refinery into terminal
- 19 Jun 13 13:46 Israel’s Oil Refineries to repair damaged unit within two weeks