04 September 2013 17:34 [Source: ICIS news]
LONDON (ICIS)--INEOS ChlorVinyls on Wednesday announced polyvinyl chloride (PVC) list prices of €1,120/tonne ($1,474/tonne) FD (free delivered) in Europe and £1,005/tonne (€1,182/tonne) FD in the UK, effective 1 September.
This represents a proposed increase of €35/tonne for Europe and £30/tonne in the UK from the company’s August level.
Another European producer said it would look for an increase of €50/tonne for its PVC contracts in Europe in September. Sellers are keen to obtain more than the formula cost pass through level, citing the need for margin recovery and reduced supply resulting from a spate of output constraints and good demand.
The formula cost pass through level for PVC contracts equates to around 50% of the ethylene contract price movement for that month. As the September ethylene contract price increased by €50/tonne in September, this equates to a cost pass through level of €25/tonne for PVC contracts in Europe.
Buying sources reluctantly conceded that an upward price move was likely for September contract business and possibly more than the pass through level according to some customers in Europe. They attributed this to a firm producer stance, good demand and balanced-to-tight supply.
One buyer in the UK, however, said it considered a proposed price rise of £30/tonne in UK to be too high, stating that it wanted to limit any upward price move to £20/tonne. It said this was taking into account euro/pound exchange rate fluctuation and what it considered to be generally sufficient supply.
PVC September price discussions are just getting underway following fresh settlement news which came out later than expected amid heightened upstream volatility over the last week.
The European PVC contract prices in August were assessed at €955-990/tonne FD in northwest Europe, €890-975/tonne FD in the Mediterranean and £845-875/tonne FD UK, according to ICIS.
($1 = €0.76, €1= £0.85)
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