Polyvinyl Alcohol (PVA) prices in the USA fell in the first week of December 2024. This decline was attributed to lower Vinyl Acetate Monomer (VAM) prices and a stable supply of PVA. However, the market faced limited trading activity due to weak demand from key sectors, particularly construction.

The supply of PVA in the U.S. remains sufficient to meet the subdued demand, but industries such as construction, automotive, and coatings are underperforming. As a result, major manufacturers like Celanese have implemented cost-cutting measures, including temporary production shutdowns. While there was a slight increase in acetyl chain volumes, weak pricing continues to impact overall margines, and production reductions are expected to continue as the market adjusts.

In the construction sector, there are signs of cautious optimism, especially in residential development. Builder confidence has increased, partly due to expectations of regulatory relief following Republican victories. Market sources indicate a rise in prospective buyer traffic and improved sales forecasts for the next six months. However, 31% of builders have reduced home prices, with the average reduction slightly lower than in October, signalling a slow but steady recovery. Thus, the inquires of product PVA remains on the lower side.

In November 2024, the U.S. construction sector displayed mixed performance, with a slight increase in building permits but a decline in housing starts compared to previous months. Building permits for privately-owned housing units were at a seasonally adjusted annual rate (SAAR) of 1,505,000, marking a 6.1% increase from October 2024, though slightly down by 0.2% from November 2023. Single-family home permits saw a minor rise of 0.1%, reaching 972,000, while multi-family authorizations stood at 481,000.

On the other hand, housing starts dropped to a SAAR of 1,289,000, a 1.8% decrease from October and a 14.6% decline from the previous year. Single-family housing starts rose by 6.4% from October, reaching 1,011,000 units, while multi-family starts remained at 264,000. Housing completions also saw a slight decline of 1.9%, totalling 1,601,000 units, but marked a 9.2% year-over-year increase. Single-family completions grew by 3.3%, reaching 1,038,000, while multi-family completions stood at 544,000. These PVA downstream trends suggest that while overall construction activity remains slow, the rise in single-family permits and starts indicates cautious optimism in the residential market, driven by the anticipation of regulatory relief and improved market conditions of PVA in the coming months.

Overall, construction activity in the U.S. remains dull, although residential development is showing signs of growth. Builders continue to adjust home prices and wait for broader market improvements. A full recovery in the PVA downstream construction sector is expected to take several months as the market adapts to current conditions.

According to the ChemAnalyst analysis, prices for Polyvinyl Alcohol (PVA) in the U.S. market are expected to decline due to adequate PVA stocks. While demand from the PVA downstream construction sector is growing, the overall demand remains subdued at present, leading to fewer PVA product inquiries. However, growing demand from the sector is anticipated to continue until the second quarter of 2025 in the U.S.