PVC Prices Continue Decline in Asia and USA, December Outlook Weak
- 03-Dec-2024 6:00 PM
- Journalist: Kim Chul Son
The global Polyvinyl Chloride (PVC) market concluded November on a steady to soft trajectory, with key factors such as declining US offers, mixed signals from Asian suppliers, and the seasonal year-end slowdown weighing heavily on sentiment. Prices were affected by the broader economic uncertainty, the holiday season in the US and Europe, and persistent weaknesses in futures and spot markets.
In Asia, the PVC market faced continuous downward pressure throughout November. Prices were influenced by bearish upstream crude oil trends and a lackluster futures market, which set the tone for the spot market. Although there was a brief rebound in early November due to load reductions by enterprises and speculative trading, this upward trend was unsustainable. From mid to late November, the market resumed its decline, driven by weak demand, high inventories, and limited downstream enthusiasm for procurement.
The calcium carbide market, a key feedstock for PVC production, remained stable at high levels without significant price increases, offering limited cost support. The PVC prices in Asia are likely to remain weak and volatile into December, with no immediate signs of market stabilization.
In the US, the PVC market also showed weakness in November, influenced by steady-to-lower import offers and holiday-related disruptions. Most cargoes for January shipments were offered this week as market participants prepared for the shortened working schedules in December. Weak demand from downstream sectors, combined with economic headwinds, added to the challenges. Resin prices are adjusting, with PVC recording its second consecutive monthly decline. This trend is attributed to a seasonal slowdown in construction activity, compounded by the impact of higher interest rates reducing construction demand, which represents 60% of PVC usage.
In the sustainable packaging sector, companies are prioritizing material reduction, reusability, and recyclability. Innovations such as monolayer films and advanced polymers are facilitating thinner packaging designs and easier recycling processes.
Turkey's PVC market mirrored these global trends, suffering from year-end sluggishness and economic pressures. The absence of strong procurement activity kept trading volumes low, with prices fluctuating under the influence of upstream crude oil and global market sentiment.
Looking ahead, market participants remain cautious about the near-term outlook for PVC. Elevated inventories, weak cost support from feedstocks like calcium carbide, and limited demand recovery are expected to keep prices under pressure in both Asia and the US. As per the ChemAnalyst, it is anticipated that the PVC prices will remain weak and volatile in December. With the global PVC market navigating a challenging macroeconomic environment, December is likely to bring continued price fluctuations, highlighting the fragile balance between supply and demand.