In the second half of October, Polyvinyl Alcohol (PVA) prices in the U.S. market held steady this week, with ample supply levels keeping the market stable. Domestic production of PVA has been consistent, with manufacturers operating at optimal capacity to meet demand. Rising methanol prices, a primary PVA feedstock for VAM and Acetic Acid, may put upward pressure on PVA production costs in the coming days. Methanex reported a 2% increase in PVA upstream methanol prices for October, which could translate to higher PVA feedstock acetic acid costs, impacting PVA pricing. However, previous supply shortages in the acetic acid market are easing as inventories increase, allowing supply chains to stabilize.

The manufacturing activities rose in October 2024, indicating a continued decline in business conditions in the manufacturing sector for the fourth consecutive month. New orders fell for the fourth straight month, but the rate of decline eased from September's peak. Additionally, stocks of purchases decreased at the sharpest rate, while longer lead times were reported for the first time in three months due to freight-related congestion and weather disruptions affecting supply chains. Thus, there was adequate stocks of PVA in the market.

Retail trends reflected mixed consumer confidence in September, impacted by election uncertainties, inflation, and global tensions. While overall retail sales saw a slight decline from August (excluding automotive and gasoline), year-over-year sales were up, Clothing sales were a bright spot, experiencing a 1.06% month-over-month increase and a year-over-year rise, showing strong household spending priorities despite cautious sentiment. Over the first nine months of 2024, total retail sales climbed up compared to the prior year.

The National Association of Home Builders reported a modest rise in builder sentiment for October, with more builders offering incentives like price cuts to attract buyers. In September, housing starts for projects with five or more units fell to a rate of almost 3 hundred thousand units, while overall housing starts dipped million units, slightly above economists' expectations.

Recent hurricanes could temporarily impact homebuilding, but reconstruction efforts may boost activity. Single-family building permits rose units, with declines in the Northeast and South, while multi-family permits plunged units.

The backlog of approved homes yet to be started decreased, and single-family home completions dropped million units. Despite a slight increase in the inventory of single-family homes under construction, overall housing completions decreased million units.

Economist expects long-term interest rates to fall soon, but the impact on housing activity will be limited due to the existing low rates on current mortgages and a high inventory of new homes.

According to ChemAnalyst, prices for PVA are projected to rise due to increasing upstream costs. Additionally, strong demand from the PVA downstream textile and construction industries is expected to persist.