US PVC prices should stabilise through end of 2012 – Georgia Gulf

02 August 2012 18:06  [Source: ICIS news]

HOUSTON (ICIS)--Prices for US polyvinyl chloride (PVC) should stabilise through the second half of 2012 after a period of swings driven by the cost of feedstock ethylene, the CEO of Georgia Gulf said on Thursday.

During the second quarter, prices had declined based on a drop feedstock costs, said Georgia Gulf CEO Paul Carrico. He made his comments during an earnings conference call.

During that period, there had been a bit of a cat-and-mouse game as market participants waited for the price to reach a bottom.

Contract prices for PVC are assessed by ICIS at 51.00-56.00 cents/lb ($1,124-1,235/tonne, €910-1,000/tonne) for pipe-grade PVC and 53.00-58.00 cents/lb for general-purpose PVC.

Carrico said that the bottom had been reached and prices would likely remain stable, as buyers replenish inventories that had been reduced while prices were dropping.

Export volumes have picked up in recent weeks and are likely to remain strong through the end of 2012, Carrico said. He added that he expects the domestic market for PVC to remain steady, as recent data on housing starts and remodelling work point to a recovery in the home construction industry, a mainstay end market for PVC.

Carrico said the North American advantage in feedstock costs, driven by expanded exploration and production of shale gas reserves, over other parts of the world, which rely on oil-based feedstocks, is likely to remain firm for the foreseeable future.

Carrico said Georgia Gulf does not have any other major planned outages for the rest of 2012 or in 2013, and that it expects to be running at near full operating rates.

($1 = €0.81)

Follow Ken Fountain on Twitter (@ICIS_Ken)

By: Ken Fountain

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