The global polyvinyl chloride (PVC) market had a mixed performance last week, with prices recovering in the US and Asia, while Europe experienced generally stable prices. The recovery in US and Asian markets was aided by favorable market sentiment and favorable supply-demand balances, despite marginal cost-side backing.

In Asia, PVC prices also made a modest recovery, led mostly by firmer market activity and a more optimistic view on futures. Market players cited an acceleration of spot market deals, reversing the downtrend that had prevailed since May. While PVC output rates remained firm, the surge in trading volumes and a further decline in inventories indicated stronger demand.

The price of calcium carbide, one of the main raw materials, fell slightly last week, offering marginal cost-side support. Strategists opine that the recent reversion in PVC prices in Asia is more directly related to better downstream buying and active upstream-downstream interaction than to any underlying cost movement. Even with still-large base inventory, the sentiment in the market seems to be improved, with PVC producers and traders expecting continuous demand in the near term.

In the US, the postponement of recently announced tariffs between the US and China restored a bit of stability to the PVC export market. US-origin PVC prices remained steady, and anticipation of increased prices is now shaping up.

A US-based merchant confirmed that producers have already begun retracting May offers, suggesting possible price increases. On the other hand, PVC sellers are focusing on other markets such as Africa, given improved margins, since demand is still lagging in Latin America. In Brazil, spot PVC prices jumped from the prior week.

Logistical stress is on the rise as Asian PVC manufacturers increase production to export material into the US before the 90-day tariff expiration. Freight out of China into the US is increasing, and space on vessels is being cut back, putting upward pressure on prices for Asian-origin resins.

Meanwhile, Europe is still following stability. Northwest Europe spot prices did not move from last week. Contract prices also remained steady in key regions. This stability comes despite a sharp decline in the May ethylene contract price, which caused most producers to kick off negotiations on potential price decreases.

European PVC manufacturers are confronted with subdued demand, particularly from the building industry, where there is a sluggish recovery. The market is also confronted with competitively priced Asian imports and continuous supply setbacks, such as force majeure announcements in France and Poland.

As per ChemAnalyst, despite local producers' supply tightness, a continued overabundance of imports from China still suppresses the European market. Contract negotiations are still strained, with most buyers anticipating further price reductions because of the decrease in ethylene prices and sluggish demand.

According to ChemAnalyst, though the near-term outlook for PVC remains cautiously optimistic in the US and Asia, underpinned by better sentiment and supply restraint, the European market is still confronted with challenges from depressed end-use demand and aggressive global supply. The price recovery might prove short-lived unless global structural demand improves.