Our comprehensive Polyvinyl chloride (PVC) reports covered by our locally-based experts, help to keep you abreast of the latest market developments and make vital business decisions. The weekly ICIS price reports are published in Asia, China, Middle East/south Asia, CIS, Europe, the US and Latin America. Price assessments vary depending on the region and include spot, import, export, domestic and contract prices.
Our independent and unbiased commentary includes an overview of weekly market activity, demand and supply trends, production issues, upstream movements, graphs and economic news.
Updated to Q1 2021
Tight global supply conditions worsened considerably towards the second half of Q1, due to production disruptions at major US producers amid a severe polar storm that occurred in mid-February. While most PVC producers in Asia operated fully throughout most of Q1, their inventories remained low as prior tight market conditions since Q3 2020 persisted due to prior production troubles in the US.
Faced with disrupted shipments from their regular suppliers in the US, buyers particularly in Latin America increasingly turned to Asian suppliers in order to replenish their immediate inventory needs. Resin demand in Asia also increased in mid-February on improving prospects of an economic recovery in the region amid coronavirus vaccine rollouts. Consumption was also further supported by various governments’ increased spending on infrastructure projects, particularly in China.
European polyvinyl chloride (PVC) availability was tight in the first quarter of 2021 following local and global production issues. INOVYN and KEM ONE, the two largest European producers, both suffered force majeures in the quarter. There were additionally several planned maintenance turnarounds by other producers. US availability was also severely constrained following polar storms in February, which pushed European export prices to record levels and combined with tariffs prevented the possibility of any PVC imports.
European polyvinyl chloride (PVC) demand rose in the first quarter of 2021 following a downstream recovery and high export market prices. Export prices rocketed to their highest recorded levels on the back of polar storms limiting US production. Demand for comparatively cheaper European product was high, which contributed to further price increases and put producers in a strong negotiating position throughout the quarter. The downstream construction industry also recovered strongly both globally and in Europe.
The tight supply situation in south Asia and the Middle East saw limited changes, as the import markets continued to grapple with global outages and production cuts. In addition, a major Indian producer had a turnaround in March, which contributed to the overall supply constraints.
Demand in the Middle East and south Asia remained firm in Q1 2021, amid months of short supply which has resulted in reduced inventories at most pipe processing facilities. The import markets were mostly dependent on Asian producers for spot lots, which fuelled the high demand as the number of competitors for a lower pool of cargoes increased.
PVC supply in Latin America during Q1 was extremely tight as local governments resort to construction projects in an effort to stimulate the economies. Supply further tightened after the polar wave froze US chlor-alkali plants along the US Gulf Coast, also limiting EDC and VCM supply to Colombia and Mexico plants respectively.
Demand in Latin America in Q1 remained strong, due to construction projects launched by local governments to stimulate the economies. Demand appeared even stronger following the mid-February polar wave that hit the US Gulf Coast halting chlor-alkali production that resulted in lack of US product to Latin American destinations.
Supply, already tight from low chlor-alkali operating rates during H2 2020, plummeted due to the mid-February ice storm. The outages damaged plants so restarts were slow and ongoing. As much as 75% of US production capacity was offline during H2 February and production had not fully restarted by end-March.
Demand during Q1 remained steady and firm on strong residential construction activity and other downstream demand for finished goods made from PVC. Residential construction spending in February was up by 21% from February 2020, a result of cultural changes wrought by working from home and low interest rates used to stimulate the economy. Demand for US PVC into global markets was also steady and strong. That steady, strong demand ran counter to the usual winter season slowdown.
We offer the following regional Polyvinyl chloride analysis and news coverage to keep you informed of factors and developments affecting prices in the Polyvinyl chloride marketplace.
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PVC is produced from the polymerisation of Vinyl Chloride Monomer (VCM). It is a versatile thermoplastic with a wide range of uses including pipes & fittings, profiles, cables, flooring, films & sheets
Polyvinyl chloride (PVC) occurs as white, amorphous, odourless powder. It is soluble in nitrobenzene, cyclohexanone, and tetrahydrofuran but insoluble in vinyl chloride. It is resistant to dilute alkalis and acids but is attacked by concentrated nitric and chromic acids.
Two types of PVC homopolymer are produced: rigid resins which are inflexible and hard; and flexible resins which contain a large proportion of plasticiser to make them soft and can be stretched. Products made from rigid PVC include pipe and conduit and roofing tiles.
Flexible PVC finds outlets in wire and cable coating, flooring, coated fabrics and shower curtains. Other outlets for flexible PVC are film and sheet and flooring.
Polymerisation is normally performed at 40-70oC with the vinyl chloride monomer (VCM) in a liquid state under pressure in a batch reactor. Suspension polymerisation is the most common PVC process because the resins produced are the most versatile and suitable for a wide range of applications.
The resin produced from the polymerisation process is hard and brittle and requires conversion into a compound by the incorporation of additives such as plasticisers, modifiers, stabilisers and processing aids before conversion into finished products.
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