US PVC October export prices slip further

04 October 2013 23:43  [Source: ICIS news]

HOUSTON (ICIS)--US polyvinyl chloride (PVC) export spot prices drifted down further on Friday, by another $5/tonne week on week, with October discussions still trending lower.

Prices were assessed at $935-965/tonne (€683-704/tonne) FOB (free on board) USG (US Gulf) by ICIS.

US PVC export prices have been on a steady decline since early September, when they were assessed at $950-970/tonne US Gulf by ICIS.

Although US exporters had tried to raise October offers into Latin America, buyers along the Pacific coast of South America had resisted the initiatives and were heard buying PVC at lower prices than two weeks ago.

“US suppliers offered PVC at $1,035/tonne CFR (cost and freight) Pacific coast of South America, down by $10/tonne from levels assessed last week,” a trader said.

 In contrast, one to two weeks ago, US PVC sellers talked of $20-30/tonne hikes, but consumers resisted with bids at $1,030-1,040/tonne CFR Pacific coast of South America, the trader added.

While some US production is down for planned maintenance turnarounds at this time, this has not put a huge impact on trade.

US PVC plants operated by Shintech and Occidental Chemical (OxyChem) are in planned turnarounds during October, according to buyers.

The OxyChem plant in Deer Park, Texas, produces an estimated 310,000 tonnes/year of PVC, while the Shintech facility in Plaquemine, Louisiana, produces 600,000 tonnes/year.

The combined production of these two facilities represents an estimated 11% of total US and Mexico PVC production.

“Maintenance turnarounds in the US have not affected exports into Mexico,” a trader said.

Meanwhile, in the Middle East, US cargoes were offered at the lowest prices at $1,020-1,030/tonne CFR Gulf Cooperation Council (GCC), lower than Asian offers there at $1,050/tonne CFR GCC. 

In the eastern Mediterranean region, US cargoes offered at $1,150/tonne CFR found limited takers, as traders and converters opted to watch the trend in prices.

In Turkey, US cargoes subject to additional anti-dumping duties (ADDs) of $45/tonne were offered at $1,020-1,030/tonne CFR. These were met with limited response during the week.

Globally, PVC demand remains bleak in all regions, according to market participants.

Possibly having a big impact on the US PVC market is the US government shutdown, sources said.

The National Association of Home Builders (NAHB) cautioned this week that the shutdown will slow down financing for federally funded mortgage loans, and no new federal underwriting of multi-family apartment projects will be made.

Federal permitting for property development and inspections by the Occupational Safety and Health Administration (OSHA) will not be available, further delaying some construction projects.

Major US producers of PVC include Axiall, OxyChem, Formosa, Shintech and Westlake.

($1 = €0.73)

Author: Heather Doyle

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