PVC Prices Persistently Follow a Downward Trend Across the Globe Amidst Weak Demand

Polyvinyl Chloride (PVC) prices followed a downward trend across the globe in the third week of June 2023 due to the weakening downstream demand from the construction sector. The PVC market participants are struggling with higher inventories this week, nevertheless surging oil prices despite anticipated weakness in the global economy.

The PVC prices in the USA experienced a downward trend due to a slowdown in construction activities amidst rising interest rates and ample availability of inventories. Moreover, the PVC prices remained unaffected by the latest improvement in the offers from the construction sector due to the stocked-up inventories this week. The Fed's pause in the hikes of the interest rates amidst falling inflation has contributed to the positive outlook of the construction sector in the US market. Meanwhile, the persistent restrictive financial conditions led to the consumers' purchasing power leading to decreased activity in various sectors influencing PVC price movement in North America for this week.

Additionally, the US Department of Homeland Security (DHS) banned the inflow of Chinese imports from two PVC-producing companies last week to keep forced labor practices out of the US supply chain. The goods, including PVC, produced by Ninestar Corp., Xinjiang Zhongtai Chemical Co., Ltd., and eight of Ninestar's Zhuhai-based subsidiaries are prohibited from entering the United States. The ban was made public on June 9 and took effect on June 12 in response to the businesses' participation that targeted members of persecuted groups, including Uyghur minority groups. Conclusively, this ban and improving construction sector demand might drive the PVC price northward for a short period in the first half of July 2023.

European PVC prices were affected by the sluggish downstream offers from the construction sector due to persistently falling buying sentiments in the housing segment and insufficient economic growth in the third week of June 2023.

This week, PVC prices declined in the Gulf Cooperation Council (GCC) region due to the discounted import offers from overseas suppliers coupled with moderate buying sentiments.

According to ChemAnalyst, PVC prices will dip in July 2023, owing to the anticipated slump in the construction industry demand amidst deteriorating consumer confidence and economic concerns in the global market. Meanwhile, the anticipated lower upstream Ethylene prices also support the declining H2 of the Year trend. Conclusively, the PVC prices are anticipated to decrease due to ample availability of stocks and a slowdown in consumer spending in the construction sector of the North American region in the Q2 of 2023.