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Shin-Etsu Chemical Seeks to Fill PVC Demand-Supply Gap in US Amid Expected Strong Demand In 2022

Shin-Etsu Chemical Seeks to Fill PVC Demand-Supply Gap in US Amid Expected Strong Demand In 2022

Shin-Etsu Chemical Seeks to Fill PVC Demand-Supply Gap in US Amid Expected Strong Demand In 2022

  • 17-Feb-2022 2:16 PM
  • Journalist: Gabreilla Figueroa

Shin-Etsu Chemical Co. Ltd. has expanded its plant activities in the United States through Shintech Inc., a PVC subsidiary. Shin-Etsu Chemical President Yasuhiko Saito said he is certain that no product will go unsold following the recent launch, despite the new facilities providing a full 400,000 tonnes of supply capacity.

The demand for PVC in the United States is estimated to be between 5 and 6 million tonnes per year. And by 2023, demand is expected to have climbed by 10% year over year, surpassing the 6 million tonne mark. The country's average annual export volume of 2 million – 2.5 million tonnes decreased to below 2 million tonnes as domestic need was prioritised. The epidemic, which has prompted many Americans to relocate from urban regions to more suburban places, provides the backdrop to this increased need. As a result of the rising construction industry, PVC market conditions have risen as well. PVC consumption is predicted to rise 3–4% in 2022 compared to the previous year, owing in part to an unresolved housing scarcity.

Others, on the other hand, predict an increase in PVC exports. Whereas last year's weather-related supply limits caused a slew of supply issues, plants across the United States are normally running this year. With Shintech's new facilities opening more export options, the country's PVC export volume is expected to rise to anywhere between 2.7 million and 3 million tonnes in 2022, prompting some to predict a return of product flow into Asia.

The Asian market for PVC currently sits in the region of USD1,260–USD1,490 per tonne, according to export pricing for February cargo by large Taiwanese facilities. Domestic shipment prices within the United States, on the other hand, are currently between USD1,550 and USD1,570. Asian market conditions are looking bullish ahead of demand season, with the spread between the two areas reducing after reaching as high as USD1,000 per tonne.

As per ChemAnalyst, “The new Shin-Etsu Chemical factory will be able to maintain supply and balance the deficit, allowing for a 290,000-tonne production increase. The new facilities are projected to add to Shin-Etsu Chemical's full-year profitability, encouraging the business to try to capitalise on the current high demand.”

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