The Global PVC Market is Slowly Gaining Momentum Amidst Tight Supply
- 03-Feb-2023 12:54 PM
- Journalist: Robert Hume
Polyvinyl Chloride (PVC ) prices witnessed an upward movement globally, backed by the growing demand from the downstream sectors and limited stocks. As a result of the higher inflation and lending rates, downstream construction sector demand fell in the fourth quarter of 2022, and presently construction sector is slowly gaining momentum at the termination of January 2023, impacting the pricing dynamics of PVC across the globe. Additionally, the PVC market players remained cautious in the first week of February 2023 about the limited stocks in the Asian market amid plant shutdowns in Taiwan and South Korea in January 2023.
The PVC market remained on the positive side in the week ending February 2023 due to tight supplies and firm demand in the Asian market. Since January, the weak availability of stocks resulted from the Lunar holidays in China and the maintenance shutdown in Formosa Plastics in Linyuan (Taiwan). The plant remained shut from 1st Feb to 28th Feb, leading to an upward price trajectory of PVC in the APAC market this week. The lower availability of PVC is further expected as China reopens after the holidays, with Beijing having lifted most of the COVID restrictions, raising inquiries within the local market.
US PVC prices have risen in the first week of February 2023, owing to the fall in the availability of stocks. The significant factor contributing to the current price rise is the reduction in the capacity, as the maintenance shutdown in Formosa Plastics in January for 20 days amidst cold weather caused a decline in the product's active capacity. As per the latest Insights, US cold wave disrupted plant operations, especially in the manufacturing units in the US Gulf. As per the trader, the US sellers have no stock availability for PVC for February 2023 offtakes.
As per ChemAnalyst, PVC prices are expected to show upward momentum in the global market, as inflation is anticipated to stabilize and can narrow the negative economic impact on the commodity market. The downstream construction sector will likely grow with the expected rebound in consumer buying sentiments in February 2023.