For Quarter Ending June 2021
Vinyl Chloride Monomer (VCM) prices witnessed consistent increment during this quarter across North America region, backed by firm offtakes from downstream PVC manufacturers. Amid critical shortage of upstream Ethylene in USA, prices of downstream derivatives including Ethylene Dichloride rose effectively in the time period which ultimately led to arise in VCM prices as well. Besides, revival in economy after successful vaccination drive, increased the demand for VCM from its major downstream PVC sector. The offtakes effectively improved month over month during this quarter, which fairly contributed to the rise in prices. Therefore, prices of VCM were assessed as USD 1106/MT during the final week of the quarter in the USA.
A mixed demand supply outlook was observed in the Asian market for Vinyl Chloride Monomer (VCM) during this quarter, where the demand for VCM varied country over country. Major manufacturers in China, experienced firm to stable demand for VCM from PVC manufacturers, as the economic activities effectively recovered from the pandemic, which increased the demand for PVC in the domestic market. While in India, prices fluctuated with resurgence of pandemic cases in the country, that reduced the offtakes from downstream PVC manufacturers during the month of May. Later, as the demand increased during the second half of June, prices rebounded effectively. Therefore, prices of VCM rebounded from USD 1362/MT to USD 1397/MT in the May-June timeframe in India.
Europe also experienced a steep rise in prices of Vinyl Chloride Monomer (VCM), backed by firm demand from downstream PVC manufacturers. During this quarter, prices of all the downstream derivatives of Ethylene rose due to its shortage. In addition, logistical issues and rising production cost also escalated the upward price trajectory of VCM along with its downstream PVC across the region during this timeframe. Moreover, lower imports from USA also remained a major concern, as it also induced an effective shortage of upstream in the region.
For the Quarter Ending March 2021
Winter storm disrupted the production activity of North America during Q1 2021, exerting pressure on chemicals prices as the demand for most of the chemicals remained firm. But in case of VCM, production of PVC remained very low and demand for VCM is directly proportional to the production of PVC, which remained halted. Thus, the VCM demand remained low throughout the quarter, Hence VCM prices faced a downward trend after January 2021 and settled at USD 1180 per MT during March, which were previously observed at USD 1220 per MT during January 2021.
In Asia, prices for VCM encountered an upward trend during January and February which later came back to value lower than in January. Chinese lunar holidays created a temporary shortage across the region which supported the price of VCM in the global market. Later during March when production resumed to its normal and inventory levels got restabilised, prices followed downward trajectory in the Asian market. In India, price of VCM dropped down to USD 900.77 per MT in March which was observed as USD 918.14 per MT during January 2021.
Europe faced shortage of PVC and VCM chemicals due to lower imports from USA during this timeframe. While the market supported the prices of PVC across the region due to strong demand and insufficient supply, but VCM demand remained on low pace due to lower production activity hence the average prices maintained its value throughout the quarter.
For the Quarter Ending September 2020
In Q3 2020, the demand for VCM edged up with strong PVC demand which witnessed a sharp uptick as most of the countries announced a gradual lift in restrictions over the construction activities imposed during Q1 and Q2. India and other South Asian countries started importing and manufacturing VCM to meet the growing demand of PVC resin from the downstream construction and manufacturing sectors. CFR India offers were raised to around USD 870 per tonne, tracing an expected uptrend. Japanese demand for the VCM rose to the year’s high in July driven by high volume exports. A leading Japanese PVC producer Shin-etsu Chemical registered strong demand from the US and Canada, buoyed by higher usage of building material for home maintenance.
The European VCM market in Q3 witnessed tightness due to planned and unplanned outages creating potential shortage in the product supply. VCM production site of INOVYN at Rafnes, Norway was taken off-stream due to technical issues prevailing in the plant’s operations. Supply tightness was heightened by the immediate shutdown of the reactor of Spolana’s Elbe Neratovice plant. Increased demand for PVC brisked the trading activity across European ports. The region’s VCM consumption witnessed a double-digit decline in Q2 because of the coronavirus-related lockdowns. However, sentiments were upbeat moving into Q3 buoyed by pick up in the construction sector.
The supply of VCM remained snug throughout Q3 because of power outages heard across the production units, forcing manufacturers to stop on-site production. Hurricane Laura forced shut down of the Westlake chemical’s pair of VCM plants with a cumulative capacity of 952.5 KTPA since Aug. 27, thereby impending a huge drop in the region’s production levels. The availability of VCM for export was restricted despite a substantial rise in the global demand for PVC. Supply tightness and robust demand pushed up the VCM pricing curve which reported new hikes during the third quarter.