ChemOrbis News Story :
PVC prices indicate a firm trend in Europe while in Asia, despite the slow demand due to the Chinese New Year, expectations regarding the post-holiday period remain firm.
In Italy, January PVC business has been concluded with €30-50/ton increases both for spot and gentlemen’s agreement deals. Nowadays, February transactions are aimed to be done with up to €30/ton increases in the spot market while producers are reportedly seeking up to €60/ton increases for gentlemen’s agreements as they complain about not being able to cover their margins for the past months whilst their costs have been rising.
Indeed, ethylene contracts for February settled with €25/ton increases in Europe while this increase followed even higher hikes of €160/ton issued between the months of November and January. Meanwhile, spot ethylene prices gained €45/ton on FD NWE basis since the beginning of January.
Producers aim to obtain at least half of the ethylene hikes considering the amount of this monomer they use in their production. Pointing to the higher upstream costs, some spot sellers even pronounce higher prices for March, too, as they want to recoup their margins. Considering the sellers’ firm attitude, some medium to large scaled buyers have already started to build up stocks in order to be prepared. Meanwhile, small sized converters still do not purchase more than their urgent needs as they hope to see advantageous import offers in the days ahead.
In China, prior to the Chinese New Year holiday, import sellers had already concluded most of their February PVC deals with $10-40/ton increases over January for mainstream Asian origins. The rest of the February deals are expected to settle at or close to the current levels while sellers were reluctant to offer discounts prior to the holiday as they expected firmer market conditions following the holiday when taking the firm oil prices and approaching high season for the construction sector into account.
Looking at Southeast Asia, the PVC market portrayed a firm outlook despite the fact that the Chinese New Year dampened the buying interest in the region during January and early February. Yet, sellers agree that the overall demand still performed better in January when compared with December. Nowadays, the PVC market is quiet due to the holiday but some early March sell ideas have already emerged. A major Thai producer reported aiming for $20-30/ton increases on their March offers on CIF SEA, cash basis while they target the same amount of increase on their March export offers when compared to their most recent February done deal level. On another note, an Indonesian producer’s goal is to lift their import offers by $30-40/ton on CIF, cash basis for the next month.
