APLA ’17: Latin America PVC market faces downward pricing pressure

RIO DE JANEIRO, Brazil (ICIS)–Polyvinyl chloride (PVC) markets continue to face downward pricing pressure on increasing availability, sources said on Sunday.

PVC supply in the Americas was easing with production and logistics in the US Gulf returning to normal after disruptions caused by Hurricane Harvey, the sources said on the sidelines of the annual meeting of the Latin American Petrochemical Association (APLA).

Also contributing to an increase in availability were stable supply of feedstock vinyl chloride monomer (VCM) to PVC production plants in Colombia and Mexico after Harvey disruptions, and the seasonal reduction of construction activity in the US on approach of winter, sources said.

Moderate PVC demand in South America as Argentina and Brazil slowly recover from their recessions in 2016, destocking at year-end to minimise tax exposure, and increasing chlor-alkali production in the US on good margins for caustic soda are additionally contributing to a softening market.

PVC demand in Asia and Europe is also projected to soften in line with winter seasonality, the sources said.

As a result of these conditions, US export prices to countries along the Pacific coast of South America are expected to continue softening into December, the sources said.

The APLA annual meeting runs through Tuesday.