Weekly Market Drivers for PVC
Aug. 28, 2018
Export pricing moves lower as demand softens amidst murky international trade outlooks from both China and Turkey. Higher ethylene prices are expected to marginally raise PVC August RMC.
? Seasonal weakness continues overseas as the US$ strengthens; increasing cost to overseas buyers.
? Ethylene will be the primary RMC driver as chlorine prices are stagnant with less than 2% of movement seen throughout 2018.
? EDC, the intermediate used in the production of VCM and subsequently PVC, is now under the latest tariff from China that was implemented August 23rd .
? International markets have been quiet this week, with many analysts and buyers still reacting to the trade conflicts between US and China, and US and Turkey.
Chlorine: Demand remains firm while supplies are leaning toward snug, despite strong production rates. Prices are currently stable, but likely to see some easing after the seasonal demand slows down, typically by September or October.
Ethylene: Ethylene traded near $0.16/lb this week, only a few cents above the ten-year lows reached in the spring. Increases in ethane prices support the slight increase.
Asia: Trading activity has slowed this week as most market participants are now awaiting new September pricing announcements. Ethylene prices in Asia are stable near the 2018 high. Currency depreciation in both China and Turkey against the US dollar is limiting demand for US PVC.
Europe: A local holiday has slowed PVC demand this week. Flat ethylene pricing alongside subdued trading kept PVC pricing unchanged week-over week.