US PVC producers impose order controls on outages, short supply

HOUSTON (ICIS)–Two US producers of polyvinyl chloride (PVC) have imposed order controls on PVC resin sales, citing tight supply and a plant outage caused by freezing temperatures, representatives of the companies confirmed on Thursday.

Westlake Chemical sent a note on Wednesday to customers informing them that because of extreme weather and mechanical difficulties at its plant in Calvert City, Kentucky, the company is imposing an order control, effective immediately, and that it would affect deliveries for an unspecified time.

OxyVinyls had already informed its customers that it was imposing an order control programme on PVC resins because “overall demand for OxyVinyls’ PVC resin is outpacing available supply”, the company said in a note sent to customers last week.

The US PVC market has been described as tight since the New Year because of stronger-than-usual demand during what is typically the slow time of the year. Another contributor is an outage at Axiall’s vinyl chloride monomer (VCM) plant in Lake Charles, Louisiana, after a 20 December fire.

VCM is an upstream product that is then polymerised to make PVC.

Also looming are planned 20-day maintenance turnarounds as US market leader Shintech, a division of Shin-Etsu, and at Westlake, which plans to debottleneck production at the company’s Calvert City ethylene unit.

The tight supplies have pushed export and spot prices up by an average of about $100/tonne during the past eight weeks.

“Everybody was snug before we starting having the outages,” a trader said. “It was tight and now it’s tighter.”

Market observers now think it will be late April before the supply-demand balance begins to return to a more normal position.

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