US PVC contracts slip for first time in six months

15 November 2013 20:53  [Source: ICIS news]

HOUSTON (ICIS)--US polyvinyl chloride (PVC) contact prices fell for the first time in six months on a combination of weak demand and lower feedstock ethylene costs, buyers and sellers confirmed on Friday.

The October PVC contract price was assessed by ICIS at 62-67 cents/lb ($1,367-1,478/tonne, €1,012-1,094) for pipe grade resin. The PVC contract tends to lag by one month.

US PVC producers have struggled through 2013 to implement price increases. At various points during the year, they have cited growing demand, tightness in supply and feedstock costs for proposed increases.

But after achieving increases in March, producers had more recently fallen short in their attempts. Producers have announced price hike initiatives each month since May, but contract prices have held steady for at least six consecutive months.

A combination of feedstock declines and weak demand pressured the market down for October.  Since ethylene makes up half of the PVC molecule, producers aim to push half of the feedstock ethylene move through.

US October ethylene contracts reached a full settlement down 2.2% last week. US October ethylene contracts shed 1 cent/lb to move to 45 cents/lb.

US PVC demand remains relatively weak from the key downstream construction sector. Market participants expected 2013 to be more robust but have been disappointed with the muted pick up in homebuilding.

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

($1 = €0.74)

Author: Heather Doyle

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