Asian PVC Market Moves Up Amid Delayed US Shipments, While Struggle for Europe Continues

The PVC (Polyvinyl Chloride) prices in the Asian market have moved up at the beginning of February 2024 due to rising upstream values, elevated freight rates, and a consistent absence of US-origin shipments. In Europe, PVC prices were stable throughout January 2024 amidst logistical challenges and mediocre activities that were preventing suppliers from seeking price increases despite negative margins. In the week ending February 2, 2024, the PVC prices exhibited slightly surged values due to disrupted supplies and higher input costs.

The Asian PVC prices have shifted northward due to rising upstream crude oil values, elevated freight rates, and a consistent absence of US-origin shipments. However, the demand has not shown must enthusiasm, as supplies were adequate, limiting PVC price increases. For the moment, US shipments are off the table because of higher FAS Houston prices as well as Red Sea Houthi rebel attacks on container vessels. The PVC market direction in the near term is uncertain, caught between cost escalations on the one hand and weak downstream inquiries on the other. According to the data, the price of PVC for Suspension GP K67 FOB Busan has seen a 4% increase in South Korea since the beginning of the year, while the import prices to China have remained stable for this week. Meanwhile, other Asian market participants are accompanied by similar hikes by the other Northeast Asian sellers to the region, although players believe the buying response hasn’t been too brisk for the time being.

In Europe, PVC prices displayed resilience since mid-January in the western European countries, despite the ongoing Red Sea crisis. The air and sea strikes in Yemen have led to maritime logistics challenges, yet the markets remain relatively stable. In 2023, PVC prices hit its lowest in comparison to the past couple of years, influenced by weak demand and high inflation in Europe. The Eurozone is facing increased import pressure since imports from the USA and Mexico constitute the major part of the union’s imports. Moreover, despite weak supply-demand fundamentals, most players believe PVC prices are nearing the bottom, thus, the focus is shifting to potential price hikes in Q1 of 2024, driven by logistics disruptions and soaring freight rates. Additionally, buyers may engage in restocking activities due to uncertainties surrounding import arrivals and higher freight rates from the US.

As per ChemAnalyst, the PVC market may exhibit upward values as the disruptions in the supplies may lead to a shortage. The ongoing conflict in the Red Sea could disrupt the global economic recovery, revive inflationary pressures, and impact manufacturing activities in the downstream industries such as construction.