EPCA ’19: Europe PVC market balanced ahead of October conference

LONDON (ICIS)–The supply-demand outlook for European polyvinyl chloride (PVC) remains balanced, with the construction market supporting downstream demand ahead of this year’s European Petrochemicals Association (EPCA) annual conference.

“For October – [I] honestly don’t see such big changes,” one producer noted.

Contract prices settled with rollovers against feedstocks in September, reflecting the balanced market for supply and demand.

“We are just finalising our [September] monthly contract discussions. On a broad scale, the result is [minus] €15-20/tonne, that means in line with feedstock developments,” a second producer said.

“Demand has picked up as expected after the summer period and the overall demand-supply ratio seem to be rather balanced,” the producer added.

Spot availability in September tightened following a producer’s declaration of force majeure, which helped prevent domestic spot prices from falling in line with feedstocks.

For the European market as a whole this was balanced by the reduced demand for specialist applications and the weakness of the key export market of Turkey.

“[In] October maybe the price can be a bit higher than in September, but [we are] not hopeful to beat the price,” one Turkish trader noted.

In the UK, some buyers have begun building stocks ahead of the scheduled British exit from the EU or Brexit date of 31 October in order to reduce vulnerability to supply shocks. Stocks were previously run down following the original first-quarter exit date.

“[We are] building stocks again, to have enough to last going forward,” one buyer said.

The multiple conflicting trends in Europe, including the weak economic outlook which has reduced demand for specialist PVC grades, makes the trend in the fourth quarter difficult to predict.

It was too early for the majority of price discussions for October to have taken place, with market players also awaiting contract settlement results for feedstock ethylene in order to have a clearer view of the market.

The EPCA annual meeting runs in Berlin on 6-9 October.

Pictured: PVC pipes in an art exhibition; archive image
Source: Brendan Beirne/Shutterstock

Focus piece by Chris Barker

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