APLA ’18: US PVC set for growth in 2019 despite tariff headwinds

CANCUN, Mexico (ICIS)–Demand growth for US polyvinyl chloride (PVC) will continue into 2019 in tandem with organic US economic growth and construction activity despite the tariff threats that have worried market participants, a plastics consultant said on Sunday.

The US economy shows no signs of slowing and construction activity is running strong, Bob Bauman of Polymer Consulting International said on the sidelines of the annual meeting of the Latin American Petrochemical Association (APLA).

Additionally, the tariffs imposed and threatened between the US and China are of such small portions of global supply and demand as to be insignificant and the tariffs will be bypassed by the establishment of alternative trade routes, Bauman said.

“The US [economy and market] is too big and too strong to be hobbled by what’s going on with tariffs,” he said.

Export sales are a secondary concern for US suppliers, Bauman said, adding that the tariff squabbles and threats are taking place on the edge of the market and not eroding the main flow of business.

“Exports are always opportunistic,” Bauman said. “The margins are thinner and they are used to sustain volumes and reduce per-unit costs.”

PVC producers in the US enjoy a low-cost production advantage that has helped leverage export sales.

In 2017, US producers exported 31% of total production.

Major US PVC producers include Shintech, Westlake Chemical, Formosa Plastics and OxyVinyls.

The APLA annual meeting runs through Tuesday.

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