Europe Nov PVC settles down on lower ethylene feedstock costs

29 November 2013 22:59  [Source: ICIS news]

LONDON (ICIS)--European polyvinyl chloride (PVC) November contract settlements moved down on the back of lower ethylene feedstock costs, marker sources said on Friday.

Price decreases of €15-20/tonne ($20-27/tonne) in Europe and £10-15/tonne (€12-18/tonne) in the UK were largely mentioned by both buying and selling sources.

This translates to €950-980/tonne FD (free delivered) NWE (northwest Europe) and €885-965/tonne FD Med (Mediterranean) and £840-865/tonne FD UK, according to ICIS.

The €15/tonne decrease is line with the formula pass-through level for PVC, which equates to half of the movement in the ethylene feedstock contract price, which went down by €30/tonne in November.

Some European PVC makers said that their margins were eroded slightly with the acceptance of a decrease of more than €15/tonne on some customer accounts.

PVC demand is slowing, as it typically does at the year end because factories are preparing to shut from mid-December onwards for the year-end holidays.

In the meantime, PVC players are preparing to start discussions for December business following the ethylene contract settlement.

PVC sellers have yet to indicate their price ideas for December, however some consumers were already preparing to ask for a rollover for December based on the expectation that ethylene would gain in value.

The reason for seeking a rollover in spite of higher costs for suppliers is because December is typically a shorter working month because of the year-end holidays, meaning that consumers are probably going to consume less PVC.

Some customers said that they may opt to start purchasing in the new year if PVC prices rise in December, although that remains unclear.

($1 = €0.74, €1 = £0.83)

Author: Renee Lawrence

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