K Fair ’16: European PVC demand impacted by low EU funds, Brexit

DUSSELDORF (ICIS)–Polyvinyl chloride (PVC) demand in central and eastern Europe is being affected by confusion regarding EU infrastructure investment funds, according to sources on the sidelines of the K Fair in Dusseldorf, Germany on Thursday.

Players said that funds expected to be allocated by the EU for infrastructure investment have been delayed, although it was unclear whether this was due to the actions of the EU or the receiving countries.

One source said that the UK’s vote to exit the EU in June of this year may have also slowed or reduced the allocation of funds, noting that the UK is one of the countries contributing to EU-wide funding.

However, additional details on the specific projects affected are not available at present.

The biggest market for PVC in Europe is in the construction sector, which accounts for the majority of seasonal changes in demand.

Sources put the countries affected as Poland, Croatia, Slovakia, Hungary and Romania, with infrastructure projects originally slated for 2016 pushed back to the beginning of next year.

European pipe producers in particular have noted that demand has been subdued in 2016, with the central European and Balkans regions particularly affected. However, this was attributed partially to falling plastics demand in Turkey compared to the previous year.

The October contract prices in the central and Eastern European regions were also heard to be trending towards a rollover, despite the increase in feedstock ethylene prices for the month.

Monthly contract price negotiations are ongoing and are expected to be concluded later in October.

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