21 December 2012 21:11 [Source: ICIS news]
Participants in Latin America and the ?xml:namespace>
Latin American PVC prices rolled over in December from November, in the face of tightening availability of
Latin American prices were expected to remain steady through the end of December, even while demand weakens as participants throughout the production chain shave inventories to reduce tax exposure.
However, buyers in Latin America noted that
Sources said that less material was available for export as US domestic consumption continues to rise.
Braskem’s PVC plant in Camacari is in full production after a maintenance shutdown last week. Resin stocks remain short, but are expected to return to normal in January, according to local sources.
Traditionally, however, demand is soft in the first quarter of the year, after the seasonal slowdown following the December holidays.
Earlier, industry participants had projected slacking demand in January, which would probably last until the Carnival holidays celebrated throughout most of
Participants throughout the production chain in
With Braskem back in full production after the maintenance, PVC inventories are expected to return to normal in January, according to sources in
While PVC producers in the
Also, PVC exports from the
Among US producers, only
The housing recovery went in fits and starts throughout 2012, with the US Department of Commerce saying on 19 December that new home construction fell by 3% in November from December to a seasonally adjusted annual rate of 861,000, off from the downwardly revised figure of 888,000. The downturn was focused in the critical single-family sector, considered the core of the residential building market.
However, the general trend in the latter part of the year showed increased housing starts and renewed confidence among homebuilders for 2013. In late November, the National Association of Home Builders (NAHB) said its housing market index jumped by 5 points in November from October to a reading of 46. That was the seventh consecutive monthly gain in the confidence gauge, and the highest mark seen since May 2006, just before the housing market began to collapse.
A PVC producer said it expects that trend to continue into 2013, particularly when the homebuilding season begins in earnest in the second quarter. While prices may not increase in January, increased demand (including from rebuilding efforts in the northeast in the aftermath of Hurricane Sandy) as well as rising feedstock costs likely will put pressure on PVC prices, the producer said.
Of course, any recovery in the homebuilding sector (and therefore the PVC market) will hinge in large part on the general economic picture, which is still far from certain. At year's end, US policymakers were still grappling with the so-called "fiscal cliff," an automatic set of spending and tax cuts that threatened to send the
But buyers were expected to continue to meet price initiatives with resistance, according to sources.
Spot and export prices PVC rose in the final weeks of 2012 on the back of limited availability because of a set of planned outages for maintenance and unplanned outages among several producers on the US Gulf coast. It was unclear whether that trend would continue into January.
Additional reporting by Ken Fountain
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