August expectations surface in Europe’s PVC market – Europe PVC market - Arhive

In Europe, July PVC deals have been mostly concluded with decreases of up to €25/ton from last month after sellers’ rollover requests have failed to stir buying interest.

Initial expectations for August are now surfacing on a stable to soft note amid speculations about a rebound in September.

The main reason behind stable to soft expectations is the softening in spot ethylene market, where supplies are comfortable. Some players think that August ethylene contracts may settle with rollovers to decreases although higher naphtha prices may counterbalance the pressure from comfortable supplies.

The upcoming summer holidays are also weighing down on the August outlook in the PVC market. A buyer in the Netherlands said that they purchased more material this month as their stocks were low. He added, “August demand will slow down as we will shut for 3 weeks due to the summer lull.”

A trader in Italy quoted, “We expect a stable to softer trend for August as feedstock prices might post marginal decreases.” A PVC pipe manufacturer also commented, “Prices have room to move lower next month considering thin trading activities and decreasing ethylene costs.”

As for the medium term, there are some speculations about a reversal in September due to some shutdowns even though the outlook is still unclear. Borsodchem is preparing to be shut soon for a planned maintenance while Vinnolit’s force majeure on S-PVC and caustic soda supplies from its facility in Knapsack, Germany remains in place. Supply from Central Europe, meanwhile, has already been tight in July. A compounder had argued, “K70 from Kem One is limited and Anwil’s availability is tight.” A few sources also stated that supply from Spolana is not that ample.

A converter in Italy said that their demand was better than expected in July as end users flocked to build stocks ahead of the possible increases in September and October.
A trader in Belgium reported, “The August outlook is stable while we expect to see a reversal trend in September due to the upward pressure from the Asian market.”

Although some small decreases are deemed as possible amid lower crude and monomer costs, supply issues and PVC producers’ will to recoup their margins after conceding to discounts for three consecutive months might make small increases possible in September, several players opine.