“Currently, the availability of US material is very high. More US PVC has been entering the GCC (Gulf Cooperation Council) these few weeks,” a trader said.
Offers from US suppliers stood at $890-900/tonne CFR (cost and freight) GCC this week, while bids were at $860-870/tonne CFR GCC.
“I’ve been hearing of more offers from the US. It’s definitely more than usual,” the trader said.
Spot PVC prices in the GCC have been falling since 9 March, shedding 9.1% over a period of six weeks to an average of $905/tonne CFR on 13 April, according to ICIS data.
The price decline was due to ample supply of the material and slowing demand with the approach of Ramadan, the Muslim fasting month that will start in mid-May.
“If the tariff on US-origin PVC is implemented by China, then the US PVC suppliers will divert their cargoes to the Gulf Cooperation Council (GCC),” a second trader said.
The northeast Asian country is a major consumer of US PVC. Exports to China accounted for about 11% of total US PVC exports in 2017.
Amid a possible trade war between the US and China, the Middle East appears to be the choice destination for US PVC.
But increased deep-sea supply is coming at a time when Middle East PVC demand is expected to weaken further due to Ramadan, with spot prices likely to be on a downtrend from May to June.
Focus article by Danielle Goh
Picture: Shipping containers await loading on container ships in the Port of Oakland, the cables at top hang from a crane used to move the containers, Oakland, California, US. (Photographer: Jim West/imageBROKER/REX/Shutterstock)