20 July 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--July contract price negotiations in the European polyvinyl chloride (PVC) market have settled with an average decrease of €75/tonne, £60/tonne in the UK, market sources said on Friday.
Slow demand, ample availability and softer upstream values – the July ethylene contract price settled down by €170/tonne from June – are the drivers of these reductions.
Several producers have reported decreases of €65-75/tonne, depending on the account and starting point of negotiations.
On the other hand, buyers said that the full ethylene decrease has now been passed on downstream, with reductions of about €80/tonne in northwest and southern Europe and £65/tonne in the UK.
Some negotiations remain ongoing, with producers expecting smaller reductions of €50-60/tonne, on increasing demand and bullish sentiment in the upstream ethylene market.
PVC demand in Europe has experienced a substantial increase from end-users and resellers, driven by low downstream inventories and anticipation of price hikes in the August ethylene contract price.
However, the PVC market remains long, with lacklustre demand and depressed fundamentals in the downstream construction industry.
($1 = €0.81) (€1 = €0.78)
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