Buyers Agree to price Increase for August PVC

30 August 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--Buyers and sellers in the European polyvinyl chloride (PVC) market have agreed to a price increase for August compared to July, sources said on Friday.

An increase of €25-30/tonne ($33-39/tonne) was agreed with customers in northwest Europe and the Mediterranean, while buyers in the UK agreed a rise of £20-30/tonne (€24-35/tonne, $31-46/tonne) for August. There was some talk from the sell-side that larger price increases were typically for low-end business, with smaller increases typically at the upper end of the range.

August prices for European PVC pipe grades are, €955-990/tonne FD (free delivered) NWE (northwest Europe), €890-975/tonne FD in the Mediterranean and £845-875/tonne FD UK. The ranges were increased by €25/tonne in Europe and £25/tonne in the UK at the low end and €10/tonne and £10/tonne in the UK at the upper part of the range.

Numbers below the ranges were also heard, but they were not widely confirmed.

Sellers were able to achieve a higher price increase of €35-40/tonne in eastern Europe because a series of planned and unplanned outages resulted in tighter supply in the region.

Some European sellers said that they intend to pass down the increase in feedstock ethylene if it gets more expensive next month.

PVC buyers accept that they might have to absorb higher prices in September, but are cautious about raising prices too sharply as they may struggle to pass down their higher costs to downstream customers, sources added.

Significantly higher European PVC prices may compel PVC customers to consider buying lower-priced product from outside Europe, such as the US or Mexico.

While some PVC customers said they plan to buy more US material next year, others said that the price difference between US and Europe was marginal and not worth the extra paperwork and waiting time.

US cargoes typically take six weeks to be delivered to European customers, and there is a 6.5 percent import duty into the European Union, market sources said.

($1 = €0.76, $1 = £0.65, €1 = £0.85)

Author: Renee Lawrence

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