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 Q3 2020
Given the economic uncertainties caused by the coronavirus pandemic, many producers had offloaded cargoes earlier in the year, resulting in lower inventory levels seen in Q3. Supply in Asia tightened further in the quarter, amid a major northeast Asian producer’s turnaround from August to September. Deep-sea availability also unexpectedly tightened due to two US producers’ force majeure declarations in mid-August and early September respectively.
Many countries in Asia managed to slow down the spread of the coronavirus infections by the first half of 2020. As restriction measures across the region continued to ease, downstream construction and manufacturing activity slowly increased. Many buyers who held off purchasing material at the height of the pandemic saw lower inventories, and subsequently started to restock more actively over the quarter.
Supply was stable early in Q3 but tightened in the second half. Producer INOVYN’s feedstock production at Rafnes was shut down in late August because of a technical issue that affected production at its northern European plants. There were several other planned shutdowns which squeezed availability, with Spolana suffering a reactor fault which shut off Neratovice production. Downstream consumption rose and increased competition for remaining volumes.
Demand was weaker year-on-year through Q3, but rebounded strongly compared with Q2 as activity in the construction industry rose and automotive construction began to increase. With lockdowns coming to an end after Q2, activity in all downstream industries increased and moved closer to typical trends. Eurostat construction figures for July showed that activity was down 4% compared with the same month last year.
Supply of PVC tightened in Q3 in the Middle East and South Asia, with major exporters to the regions impacted by various factors like force majeures, production cuts, and scheduled plant turnarounds. Domestic producers ran their plants at maximum capacity, but were unable to make up for the supply shortfall.
Demand for PVC in the Middle East and South Asia increased in Q3, as most countries had emerged from lockdowns and were eager to resume work. The lack of activity in Q2 had resulted in low inventories for pipe processors, and buyers were keen to buy spot volumes to replenish inventories despite the lull in infrastructure activities amid the summer heat in the Middle East and the monsoon season in India.
PVC supply in Latin America during Q3 was adequate to tight as construction projects were reactivated once the pandemic seemed to be somewhat under control. Brazil continued to import EDC to maintain operations at its PVC plant in Maceio. Mexico and the US continued to compete in export markets shipping material to South America, but hurricane-related force majeures resulted in a lack of US supply. Venezuela’s PVC production has not restarted since mid-2017.
Demand fluctuated in Q3, with buying interest more intense towards the end of the quarter after quarantine measures were eased and the construction sector was reactivated. But demand in Brazil was steadily strong, with buyers importing large volumes from several international sources.
Supply declined on several factors: lower chlor-alkali operating rates on overall weak chlorine demand; a feedstock problem that prompted a force majeure from two Formosa Plastics plants; and a hurricane that knocked out power to a Westlake Chemical feedstock plant in Louisiana, prompting the company to declare force majeure on all of its North American VCM and PVC production. Tight supply dominated market dynamics throughout Q3.
Demand demonstrated a strong recovery following the reopening of the US economy after the coronavirus-related lockdowns in Q2. Demand recovered to a level even greater than before the lockdowns as homebound workers refurbished and updated their homes, including adding home offices, backyard amenities and improvements such as new flooring. The demand extent of the recovery surprised even PVC producers.
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.