AFPM '13: US PVC price hikes met with mixed signals

23 March 2013 16:30  [Source: ICIS news]

HOUSTON (ICIS)--Participants in the market for US polyvinyl chloride (PVC) are continuing to weigh the latest rounds of price initiatives made by producers, sources said in advance of the annual International Petrochemical Conference (IPC) in San Antonio, Texas.

While US producers of PVC were said to be holding firm in seeking a 5 cents/lb increase for March contracts, a proposed 3 cents/lb hike made by some producers for April contracts seems less likely to gain wider acceptance, sources said.

Producers cited continuing tightness in availability of product in the wake of a set of outages, both planned and unplanned, in late 2012 and early 2013, as well as strong demand.

But falling prices abroad, particularly in Asia, were giving buyers reason to put downward pressure on US prices.

Two producers announced April initiatives, but others did not make similar announcements. According to market sources, one producer stated in a written notice that it would not support an April increase, saying it was not in keeping with the current state of the market.

Meanwhile, the latest production statistics from The Chlorine Institute, a US trade group, showed a slight uptick in February chlor-alkali production following a sharp drop in January. But the upturn did not offset the drop from the robust figures seen in December.

However, PVC market participants are anticipating increased domestic demand as the long-dormant US home construction industry moves into what many see as a firm rebound, as evidenced by the latest statistics for home starts and building permits. Home construction is a key downstream segment for PVC.

The IPC, hosted by the American Fuel & Petrochemical Manufacturers, takes place from Sunday through Tuesday.

By: Ken Fountain

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