Thin buying cushions impact of PVC shutdowns across Europe
Oct. 11, 2018
In Europe, rollovers have passed on October PVC deals in most cases, although there are still some sellers aiming for slight increases of €5/ton. The main reason behind this was cited as slow buying interest that mitigated the impact of the production loss amid regional PVC shutdowns. A seller said, “We were able to procure our customers’ requirement despite planned and unplanned outages at our Central European supplier’s upstream/downstream units.”
A converter from Italy reported to have purchased Central European PVC at stable levels. He added, “We expect to close our deals with rollovers for October despite some suppliers’ faint hike attempts.”
A producer source also admitted that October deals might be closed with mostly rollovers as PVC is not following the firmer trend of energy markets and higher ethylene settlement.
A distributor in Switzerland, who sold his quotas with rollovers, noted that the market is balanced between production outages and weak demand. “However, rising crude and naphtha prices might squeeze sellers’ margins going forward if demand shows no rebound. Players widely believe that PVC might continue to follow a mostly steady path for the remainder of the year,” he commented.
As end product demand is slow in certain sectors, buyers are sticking to their hand-to-mouth purchases even though their stocks are low. A major market participant, meanwhile, commented that some buyers pay attention not to be left with high stocks in case prices soften.
Competitive import offers from the US remained as another factor to watch in the coming days as they might magnify the pressure on part of producers and put a cap on some sellers’ attempt to preserve margins.