The Poly Vinyl Chloride (PVC) prices gained a northward price momentum in the APAC and North American region, unlikely to drop in the European market. The recent rise in PVC prices was driven by supply cuts in both the regions, North America and Asia Pacific, and a slight improvement in the downstream demand from the construction and packaging industry. Therefore, the increase in polymer prices in Asia and Europe was prompted by the decreasing inventory availability amid a reduction in the production run rates and supply shortages in the line of improved demand fundamentals in the week ending August 18, 2023.

The PVC prices in the Asian market continued an upward trend during the week ending on August 18, 2023, unlikely to China, and were primarily driven by a recent increase of 9.8% due to the increase in the demand from the downstream construction sector amid the positive momentum in housing demand and stable economic conditions within the region. Moreover, Hanwha Solutions at Yeosu, South Korea, scheduled a maintenance shutdown at the end of August 2023 with a total production capacity of 460,000 mt/year, which allowed market players to sustain their margins in the international market amidst low stocks. The local market witnessed limited stock availability, which led to a significant gap between supply and demand. The PVC market exhibited a bullish trend throughout the week. Additionally, market participants opted to lower their production rates and limit supplies to maintain their profit margins by gradually raising commodity prices.

In recent weeks, the United States PVC market has experienced a significant tightening of supply as multiple major PVC plants undergo planned shutdowns and maintenance, which led to the rise in the prices as the disruptions have led to concerns about potential price volatility in the PVC industry.

One of the key players affected by these supply disruptions is Formosa Plastics, a prominent PVC producer with a total production capacity of 753,000 MT /yr in Point Comfort, Texas, which has been shut down for planned maintenance throughout the second half of August. Additionally, Formosa's 536,000 MT/yr producing PVC unit in Baton Rouge, Louisiana, is scheduled to undergo planned maintenance in September. Another significant contributor to the supply disruption for PVC in the USA is Westlake Chemical Corporate, as it is set to temporarily close its 725,747 MT/yr production unit of upstream Vinyl Chloride Monomer (VCM) plant at its Plaquemine, Louisiana complex for maintenance in September 2023 and this maintenance is projected to have downstream impacts on PVC output further. Shintech, a major PVC producer in the United States, plans to temporarily shut down its Plaquemine complex, including its substantial 890,000 MT/yr producing PVC unit, in October for planned maintenance and improvements.

As per ChemAnalyst, the combined impact of these planned turnarounds is expected to curtail overall PVC availability in the United States throughout the year's second half. Market sources suggest that this tightening supply situation could support PVC prices. However, despite the temporary price uptick, demand for PVC is predicted to remain sluggish throughout this time frame. Consequently, once the maintenance and turnarounds are completed and supply returns to normal levels, there is a possibility that PVC prices could retreat to previous levels in the USA and Asia.