Price and market trends: Buy-sell price ideas gap could slow down US PVC exports

27 September 2013 10:11  [Source: ICB]

Despite the much-discussed tight supply in the region, US Gulf suppliers are offering polyvinyl chloride (PVC) to abroad, but a wide gap in buy-sell price ideas is limiting transactions, traders said on 20 September.

“US producers are targeting higher offers for October-loading cargoes because of limited availability following scheduled turnarounds,” a supplier said.

US PVC plants operated by Shintech and Occidental (OxyChem) are expected to be in planned turnarounds during September/October, the supplier added. US offers to China were less frequent than normal because of tight supply, but still heard at $1,010/tonne (€747/tonne) CFR (cost and freight) CMP (China Main Port), a trader confirmed.

In the GCC markets, US cargoes for end-September loading were heard at $1,050-1,060/tonne CFR GCC and October loading was heard at $1,060/tonne CFR GCC.

US offers were met with little interest, as market participants thought the prices could be too high. They may wait for major Taiwanese producer, Formosa Plastics Corp (FPC), to release its official price announcement for October-loading cargoes before making their next move.

US PVC cargoes loading in October offered at $1,030/tonne CFR Turkey received limited response because of the additional anti-dumping duties of $45/tonne and 6.5% import duties.

Buying ideas for US cargoes to Turkey were capped at $1,000-1,010/tonne CFR.

“The CFR numbers are far too low and can’t offer a reasonable netback for FOB US Gulf right now,” a supplier said.

Export offers have slipped to as low as $1,000/tonne CFR destination port, which could equate to around a $920/tonne FOB US Gulf price, a trader said.

FOB US Gulf export prices last traded in a range of $950-970/tonne, as assessed by ICIS.

“Offers are higher from the US because of tight supply, but buyers are taking very little product at these offer prices and demand is weak so that is keeping the market in balance,” a trader said. “I think export prices will come down quick because of this huge gap in buyer/seller price ideas.”

Another PVC supplier thinks that export activity could improve from the US as a result of recently improved currency values.

Meanwhile, PVC demand remains low, with weak construction activity in Europe, slower business in Asia and relatively weak demand in the US.

By: Heather McGuire Doyle
+1 713 525 2653

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