The PVC Market Turns Bearish in the US and Europe Regardless of the Output Cuts

The Polyvinyl Chloride (PVC) prices declined at the termination of November 2023 due to the slowed downstream consumption across the US and European markets amid economy-related challenges that coincided with weak profit margins for the enterprises. Moreover, reducing the production rates to increase the price levels couldn't be sustained as rising import volume triggered competitive pressure across these regions, including the PVC industry. A significant contraction in the downstream demand also imposed downward cost pressure on the PVC market.

In Europe, the approach of reduced operating rates to sustain the profit margins of producers and traders did not empower suppliers to enhance margins in the face of competitive pressures from the import market. In contrast, PVC supplies were consistently beaten by low demand despite production cutbacks. The European PVC market has predominantly outperformed other global PVC markets, prompting import suppliers to redirect their shipments to the region during global market downturns in November 2023. Additionally, the reason behind this approach was to lower export prices amid the ongoing deterioration of market conditions and avoid piling up of the inventories. Moreover, no signs of a revival in the downstream construction demand for PVC have been seen for several weeks in this quarter due to a significant decrease in the number of new construction projects.

The American PVC market remained subdued at the end of November 2023, and prices witnessed stagnancy, with no marked shift in the purchasing sentiments from the downstream construction and packaging industry. The buyers anticipated an elevation in the prices due to the new import tariff, and as a ripple effect, they paused their buying activities for the time being. November saw a surge in PVC imports, coinciding with another effort by the Brazilian government to implement measures safeguarding local producers. As per the latest analysis, the export prices for USA PVC showed no variation in the initial week of December 2023. In addition, the upstream Ethylene prices saw an increment this week, causing prices to stabilize in the line of escalation in the input costs.

As per ChemAnalyst, PVC prices will likely remain on the downward side in the coming weeks of 2023 due to a weak demand outlook and more than enough supplies. It is expected that the reflection of low demand fundamentals across the global economy will likely overweigh the PVC market situation for December 2023 in the line of destocking enthusiasm amongst the downstream buyers.