Quarterly Update on Poly Vinyl Chloride (PVC) Market
For the Quarter Ending June 2021
After registering record growth till the end of April, prices of Poly Vinyl Chloride (PVC) started normalising in May following the improved supply activities in USA. North American market revival, from pandemic after successful vaccination drive, pushed up the demand for PVC from domestic construction sector. Meanwhile, major plants like Oxychem and Westlake Chemicals lifted their force majeure from PVC suspension grade in June, which also improved the supply of PVC across the region and helped the prices to gradually decline.
Asian market showcased firm demand for Poly Vinyl Chloride (PVC) from downstream construction sector in April, which later declined in month of May. Manufacturers based in China were readily exporting PVC to the Indian market during April on fairly high prices. The steep rise in pandemic cases in India, reduced the demand for PVC from the respective construction segment, while the availability was abundant enough to satisfy the overall need of the country. Therefore, prices of PVC declined in later half of the quarter in the Indian market, and finally hovered around USD 1617/MT during the last week of June.
Europe experienced huge spike in price of PVC in the country, backed by sturdy demand pattern and critical feedstock and material shortage. Due to lower imports from USA, prices of feedstock Ethylene as well as its derivative products including, EDC, VCM and PVC were heard witnessing week on week surge during this quarter. In addition, logistical issue like container shortages and soaring freight cost also exerted additional value on all the imported commodities in Europe during this period.
For the Quarter Ending March 2021
PVC production across North America region was disrupted by a rare freezing storm across the gulf, which forced the total PVC output to reach its lowest limit during Q1 2021. Due to the disruption caused by the winter storm, availability of Feedstock materials including monomer Vinyl Chloride was reduced, and high demand from domestic as well as international market supported the prices to seek uptrend. Hence the average PVC prices rose by 16.83% across the region and settled at USD 1717.5 per MT during March. Apart from all these disruptions, Shintech announced the investment of USD 1.3 billion on the expansion of its PVC plant in Plaquemine, Louisiana. This huge investment is expected to boost the overall production capacity by 838 Million lb per year.
In Asia, prices of PVC followed rapid uptrend throughout the quarter, due to high demand from domestic market but insufficient availability of cargoes. Hike in shipping container prices and uplifted freight cost across southeast Asia further supported this price uptrend in the quarter. Besides, winter storm across the US Gulf region disrupted the global supply and disturbed the trade activity in Asia. In addition, bullish demand for PVC from Chinese market supported the price in other APAC countries, like India. In Indian market, calendaring K60 grade PVC CFR price rose by 30.36% and settled down at USD 1615.97 per MT in March.
Overall exports of PVC from Europe increased during Q1 2021, due to the reduced production across US Gulf coast. Rising freight cost and shortage of shipping containers supported the prices PVC, and hence these climbed to around USD 113 per MT in some CIS countries. Although the domestic production of PVC remained tight across the region due to some planned and unplanned plants turnarounds.
For the Quarter Ending June 2020
Asian PVC market outlook remained strong as several manufacturers were seen dumping cargoes earlier this year resulting in lower inventory levels of the product. The supply deficit aggravated further with a major producer in Northeast Asia implementing a maintenance turnaround. As many countries managed to tackle the spread of contagion, market activities slowly increased by the end of the quarter with continuous ease in restriction measures across the region. Traders witnessed increased purchasing as buyers were optimistic over further demand revival with resumption in production for majority of the downstream industries. With several scheduled plant outages in the next quarter, the demand and supply gap are anticipated to widen in the later part of the year.
As major exporting countries in South Asia and U.S. struggled to pull off their trade activities due to force majeures like production cuts and turnarounds to contain the spread of virus, supply of PVC tightened in the quarter ending June 2020. Although domestic manufacturers operated their plants at maximum capacity but were unable to sufficiently cater the overall demand. Despite damped infrastructure activities in the regions, buyers were keen to buy large spot volumes of pipe grade PVC on high hopes of resumption of construction activities by the coming quarter and to replenish the slumped inventories due to pandemic blows.