AFPM ’14: Asia pressuring Latin America PVC lower

29 March 2014 18:25 Source:ICIS News

HOUSTON (ICIS)--While polyvinyl chloride (PVC) prices for April are being heard at a rollover from March in all resin-producing countries in Latin America, sources throughout the region continue to note significant downward pressure from the trend in Asia.

PVC prices in Asia for April business will give direction to the resin markets in the Americas, according to input from industry participants heading into this year’s International Petrochemical Conference (IPC).

Official benchmark prices have surfaced in Asia, with Formosa Plastics Corp (FPC) announcED a $40/tonne decrease in April from March. US offers into Asia and the Middle East have also declined.

Easing PVC availability is additionally contributing to weakening PVC market sentiment. PVC supply in the Americas is projected to improve as maintenance turnarounds in the US are being completed at the end of March or early April. Also, Axiall’s vinyl chloride monomer (VCM) plant in Lake Charles, Louisiana, was heard starting up, ending the shutdown caused by a fire on 20 December.

Initial indications of weakening markets in the second quarter are in contrast to the trend in the first quarter, when prices in Latin America gradually rose on snug US supply.

However, pricing direction in Venezuela is the outstanding exception to any trend, as government price controls frequently allow the country to march out of step with markets in the rest of Latin America and in other global regions.

Demand in Latin America is healthy, in line with seasonality, but expected to soften on approach of Easter, when participants frequently take a week-long break, sources said.

PVC producers in Latin America are Braskem, Mexichem and Solvay.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place 30 March-1 April in San Antonio, Texas.

By Ron Coifman