26 July 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European July polyvinyl chloride (PVC) contracts have firmed for low-end business because of seasonally improving demand and restricted supply, despite a stable upstream ethylene contract price in July, market participants said on Friday.
Market feedback for the upper end of the range, however, was not widely forthcoming. Even though there was a general firmer price tendency, some players –including a few sellers – suggested that prices at the upper part of the spread were already quite high. The latter was especially true in the Mediterranean and to some extent in northwest Europe as well. As a result, prices have been assessed as more stable at the upper end of these ranges.
In the UK, rollover prices and numbers below the range were also heard in some cases. Taking these factors into account, prices at the upper part of the spread have been capped and assessed as steady.
European PVC contract prices were assessed at €930-980/tonne ($1,240-1,307/tonne) FD (free delivered) NWE (northwest Europe), €865-965/tonne FD Med (Mediterranean) and £820-865/tonne FD UK, according to ICIS.
A few producers said they had secured larger increases of €20/tonne in northwest Europe and the Mediterranean, and one of the sellers said it had implemented price rises of £20/tonne (€23/tonne, $31/tonne) in the UK. However, there was insufficient market confirmation to substantiate this.
There was some consensus that larger price hikes of €20-25/tonne were possible, but in central and eastern Europe, because of particular tightness in the region.
PVC demand has seasonally improved over the last few months, supported by better weather conditions. There is also talk of some catch-up in demand needed from earlier in the year, following the extended winter weather conditions. Demand is expected to hold up reasonably well – with little summer dip in activity expected – with the exception of the Mediterranean.
Supply remains restricted because of a spate of output constraints and reasonably good demand.
There is some expectation that PVC contract and spot prices could move up in August, if the upstream ethylene July contract price were to increase in August, demand continues to be reasonable and the market remains on the tight side.
($1 = €0.75, £1 = €1.16, £1 = $1.54)
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