June PVC (Polyvinyl Chloride) prices settled towards a southward direction in the global market with prices kept on fluctuating in a certain range depending on the downstream construction industry demand and availability of the product. The global market buyers seek price concessions due to decreasing raw material and energy costs. Despite this downward pressure on feedstocks and crude oil prices, increasing container shortage and shipping costs in Asia and strong domestic demand for PVC in the US are shaping market behavior. In Europe and the UK, markets have been attentively observing price increases, which are moderated by seasonal demand fluctuations and an uncertain economic outlook.

Fall in the PVC production costs is driving UK and European buyers to seek further price concessions. The feedstock EDC, VCM, and upstream crude oil prices remain under downward pressure in the PVC market. However, the situation is more complex, as container shipping costs from Asia are surging due to western retailers importing goods for the upcoming demand season.

Additionally, there is a rush to import goods ahead of potential tariffs on Chinese imports to the US, a situation prompted by the forthcoming US elections in June 2024.

The import of US-origin PVC is gaining traction in the European and UK markets during this period. US PVC producers are maintaining strong pricing, citing robust domestic demand and high domestic prices. This stance is leading to price stability or an increase, particularly in the regions where the supply is tight.

Sellers across the Asian PVC industry are anticipating price increases, though factors such as lower seasonal demand during the summer holiday period might affect the positive momentum of the prices. Ultimately, market conditions will dictate outcomes, along with depleted supply chains. Moreover, the turnaround could have significant impacts on the PVC supplies in the coming weeks. In China, the Erdos Chlor-Alkali Chemical, Erdos, Nei Mongal with a total production capacity of 33333 TPM underwent maintenance turnaround for 30 days. Tangshan Chlor Alkali, Tangshan, Hebei Province with a total production capacity of 33333 TPM underwent maintenance turnaround for 30 days during June 2024.

Rising freight rates are becoming a significant concern, with increases of USD 4,000 per container since the beginning of the year. Additionally, disruptions at Middle Eastern ports are affecting supply to Europe.

As per ChemAnalyst, despite the supply-related challenges, PVC prices are expected to remain relatively stable throughout the summer in the global market. The PVC producers have minimized output due to weak demand in the downstream construction sector, while converters and distributors are maintaining low inventory levels due to financial pressures. Consequently, any adjustments in the PVC prices are likely to be passed on immediately in the global market.