For the Quarter Ending September 2024
North America
In the third quarter of 2024, the North American Vinyl Chloride Monomer (VCM) market experienced relative price stability, shaped by a combination of supply chain disruptions, fluctuating feedstock costs, and subdued demand from the downstream PVC sector. Throughout this quarter, the VCM market contended with decreased consumption linked to a slowdown in the construction industry and weaker export markets, which collectively exerted downward pressure on demand.
The feedstock market for Ethylene presented a notable dynamic during this period. While Ethylene prices experienced an uptick in the early part of the quarter, they fell in September, highlighting the inherent volatility of the upstream market. This fluctuation in Ethylene prices played a critical role in influencing VCM pricing. Despite the initial rise in Ethylene costs, the overall VCM prices remained stable, primarily due to competitive pressures from the PVC industry, which has faced its own set of challenges. Moreover, the region encountered significant supply chain disruptions caused by hurricanes and plant shutdowns. These operational challenges further complicated the market dynamics, contributing to the steady prices observed despite the unfavorable conditions.
The balance between rising feedstock costs and softening downstream demand created an environment where the opposing market forces effectively offset each other, leading to overall stability in VCM pricing. In summary, the third quarter of 2024 showcased a complex interplay of factors that allowed the VCM market to maintain stability despite significant external pressures and shifting dynamics in the upstream and downstream segments.
Asia
The third quarter of 2024 in the APAC region witnessed a significant increase in Vinyl Chloride Monomer (VCM) prices, with multiple factors influencing this uptrend. Plant shutdowns, such as those at Tianjin Bohai Chemical Development Company in China due to an explosion, and at Sinopec Qilu Petrochemical Corporation in Zibo, Shandong due to a major fire, disrupted supply chains, leading to supply constraints. These disruptions, coupled with force majeure situations like the one at Thai Plastic and Chemicals in Thailand due to a fire, further exacerbated the limited availability of VCM in the market. The overall pricing environment for VCM in the region showed a 6% increase from the previous quarter, with a 1% price difference between the first and second halves of the quarter. In India, which experienced the most significant price changes, the quarter ended with VCM priced at USD 707/MT CFR Tuticorin. The pricing environment in India has been marked by a stable to positive trend, driven by the supply-demand imbalances caused by the plant shutdowns and force majeure events, highlighting the challenges faced by the VCM market players in the region.
Europe
In the quarter ending September 2024, the European Vinyl Chloride Monomer (VCM) market exhibited a largely stable pricing environment, influenced by several interrelated factors. The market was primarily characterized by weak demand from the downstream plasticizer industry, which has been affected by a sluggish construction sector across the Eurozone. This has resulted in only modest growth in the new housing segment, further dampening the demand for VCM. Despite these challenges, the overall supply levels remained adequate, contributing to a balanced market dynamic that limited significant price fluctuations throughout the quarter. Notably, Germany experienced the most pronounced price changes. However, overall VCM prices remained steady due to a combination of constrained supplies and ongoing supply chain disruptions, including port strikes and flooding, which have exacerbated operational difficulties. The lackluster demand from various downstream industries, particularly the plasticizer sector, placed downward pressure on VCM prices. However, this bearish sentiment was mitigated by supply constraints, allowing for a relatively stable market atmosphere. Furthermore, the stability in upstream Ethylene costs has also played a critical role in maintaining price equilibrium. Overall, while the European VCM market faced challenges from weak downstream demand and external disruptions, the interplay between supply constraints and increased upstream Ethylene costs resulted in minimal price movement during the third quarter of 2024, reflecting a cautious but steady market sentiment.
MEA
In the quarter ending September 2024, the Vinyl Chloride Monomer (VCM) pricing in the MEA region witnessed a stable trend, with Qatar experiencing the most notable price changes. The market was influenced by various factors leading to decreased prices during September 2024. Supply disruptions, operational challenges, and high production costs contributed to the mixed VCM price trend. The global ocean freight market faced significant challenges, impacting the VCM supply chain and leading to reduced capacity and higher charter rates. Additionally, geopolitical tensions and economic factors further complicate the trading environment, causing price reductions. Qatar, specifically, saw a decrease in demand from the PVC industry and limited supplies, resulting in a decrease in prices. Overall trends indicated a negative sentiment, with a 3% decrease from the previous quarter and a 1% price comparison between the first and second half of the quarter. The quarter-ending price for VCM in Qatar stood at USD 623/MT, reflecting the prevailing decreasing pricing environment. Plant shutdowns during the quarter included disruptions at key facilities.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American market for Vinyl Chloride Monomer (VCM) experienced a notable increase in prices, driven by constrained supply and heightened input costs, particularly due to limited inventories and rising crude oil prices, which reached a two-month high. Additionally, severe weather conditions, including the hurricane season and floods, disrupted industrial demand and production rates, further tightening supply chains. The combined effects of these disruptions, along with a shortage of containers and logistical challenges, fueled an upward trajectory in VCM prices.
Focusing on the USA, the country experienced the most significant price fluctuations within the region. Seasonal factors, such as the hurricane season, exacerbated supply constraints, leading to an increase this quarter. The pricing environment was further strained by robust domestic demand in the PVC industry and export opportunities, particularly in Africa and Asia, as buyers sought alternatives to mitigate supply gaps.
This upward trend reflects a positive pricing environment, driven by high input costs, robust demand, and constrained supply, underscoring the persistent inflationary pressures within the PVC market in North America during Q2 2024.
APAC
During Q2 2024, the Vinyl Chloride Monomer (VCM) market in the APAC region experienced stability in prices, primarily driven by several critical factors. A surplus in regional supply, coupled with declining upstream Ethylene prices, exerted downward pressure on VCM prices in the middle of the quarter. Additionally, a series of plant shutdowns severely impacted market dynamics at the end of Q2 of 2024. For instance, Kaneka’s plant in Takasago, Japan, experienced a force majeure due to a power outage, resuming operations only in mid-May. Similarly, unscheduled shutdowns plagued Hanwha Solutions Chemical Division in Ningbo, China, due to floods, and Tianjin Bohai Chemical Development Company in Tianjin, China, following an explosion. These disruptions, while reducing supply temporarily, could not counterbalance the overarching oversupply and eased production costs, thereby perpetuating the price stability amid moderate PVC demand. In India, VCM prices reflected the maximum volatility within the APAC region. The overall trend showcased a steady decrease, influenced by seasonal procurement behaviors and fluctuating consumer confidence in the real estate sector. Despite the bullish downstream PVC sector, ample inventories and moderated demand led to cumulative price stability for the time being. By the end of Q2 2024, the VCM prices settled at USD 672/MT CFR Tuticorin, marking the quarter as stable in terms of pricing.
Europe
In Q2 2024, the VCM market in Europe experienced a marginal decrease in prices. This decline was driven by several key factors, including subdued domestic demand within the PVC industry, and intensified competition among regional sellers. Additionally, the economic outlook remained uncertain, exacerbating the bearish market sentiments. The upstream cost pressures, especially from ethylene, eased somewhat but were insufficient to buoy VCM prices. Shipping disruptions and logistical challenges further compounded the market's instability, causing many producers to reduce output rates. Focusing on Germany, where the most significant price changes occurred, the market dynamics closely mirrored the broader regional trends. German VCM prices fell sharply, influenced by a combination of high production costs and weak downstream demand, particularly from the PVC industry. The quarter-ending price stood at USD 925/MT for downstream PVC Suspension Calendering Grade K57 FD Vreden, underscoring the bearish market sentiment that has dominated the VCM market during this period. Overall, the pricing environment for VCM in Germany during Q2 2024 has been marginal negative, driven by structural market weaknesses and supply-related disruptions.
MEA
The second quarter of 2024 has seen stability in the Vinyl Chloride Monomer (VCM) prices across the Middle East and Africa (MEA) region. The downward trend in May 2024 is influenced primarily by an oversupply situation and a decline in upstream crude oil prices. The price decrease is further exacerbated by adequate inventory levels and weakened support for high Ethylene prices. Regional markets have experienced increased competitiveness, particularly from Asian countries like South Korea and China, where VCM prices have continued to decline. Compounding these challenges were sustained reductions in production rates and container shortages, which further tightened the supply chain. Focusing on Saudi Arabia, the region witnessing the most substantial price flux, these dynamics were particularly pronounced. The overall trend has been bearish, driven by moderate to high supply levels and a moderate demand environment during May 2024. This coincided with a Force Majeure event at the Qatar Vinyl Company (QVC) in Mesaieed, which halted operations for three days in April due to floods, temporarily disrupting supply and increasing prices of VCM. The pricing environment remained stable, with the latest quarter-ending price at USD 615/MT for VCM FOB Hamad in Qatar.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, there was a period of rising prices for Vinyl Chloride Monomer (VCM) in the North American region. Various factors influenced market prices during this time.
Firstly, there was a surge in demand from the downstream PVC sector, fueled by infrastructure development projects and increased manufacturing activity. However, a concerning development was the collapse of Baltimore's Francis Scott Key Bridge, raising concerns about the smooth movement of the product in the United States. This incident occurred at a precarious time when tank supplies in the region were already strained due to unfavorable weather conditions.
During this quarter, there was a focus on consumer inflation data in the United States, especially following a strong payroll employment report indicating a robust labor market. At that time, interest rates were in a contractionary phase, aiming to slow down economic expansion. Moreover, the exported value of downstream PVC dipped by 5.2% during January 2024, indicating a surge in downstream inventory levels. The pricing environment for VCM in the North American region during Q1 2024 was positive, with rising prices driven by increased downstream PVC demand and supply constraints.
APAC
The first quarter of 2024 was challenging for Vinyl Chloride Monomer (VCM) prices in the APAC region. The market experienced a mix of factors that influenced prices. Overall, there was a slight decline in prices compared to the same quarter last year. This was attributed to weak demand in the downstream PVC industry, resulting in sluggish consumption. Additionally, the VCM market faced uncertainties due to plant outages and disruptions in supplies. In India, there were significant price changes in the VCM market. Prices remained stable in February, primarily due to limited regional supplies and a scarcity of available stock. However, in January, prices experienced a pause, supported by stable downstream PVC demand and limited supplies. The market was balanced, with moderate supply and demand. Looking at the overall trend in the quarter, prices saw a decline of 2.9% compared to the previous quarter in 2024. This decline was attributed to subdued demand in the downstream PVC industry and the narrowing gap between supply and demand. The quarter-ending price for VCM in India was USD 669/MT CFR Tuticorin. In conclusion, the pricing environment for VCM in the APAC region was negative in the first quarter of 2024. Weak demand in the downstream PVC industry and disruptions in supplies contributed to the decline in prices. However, the market remained balanced with moderate supply and demand.
Europe
The recent increase in VCM (Vinyl Chloride Monomer) prices in the European market during the quarter ending March 2024 reflected moderate demand and a scarcity of suppliers. Challenges faced by the European VCM supply chain, including logistics disruptions linked to the Red Sea turmoil, contributed to the current pricing trend. Downstream production rates decreased due to supply disruptions, leading market participants to take a cautious stance on further changes. Limited VCM supplies in the German domestic market were notable despite low downstream PVC demand fundamentals amidst slowed construction activities. Global crude oil prices surged, surpassing USD 87 per barrel, driven by factors like tighter physical markets, OPEC+ production cuts extension, and geopolitical tensions. However, VCM prices in the German market remained stagnant, with a narrowed demand-supply gap and limited stock availability amid rising input costs in the middle of the quarter. Supply concerns emerged in March 2024 as the Easter holidays approached, particularly focusing on German ports facing closures during weeks 13 and 14 due to the holidays. Moreover, the export value of downstream PVC increased by approximately 27% in January 2024, indicating a shortage of inventories in the line of production rate cuts further escalating VCM prices this quarter.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, the North American Vinyl Chloride Monomer (VCM) market experienced a decrease in prices. This quarterly decline was influenced by diminished demand from downstream Polyvinyl Chloride (PVC) manufacturing sectors and abundant supplies.
The limited VCM demand in the USA's PVC industry was a result of a slow economic recovery and stagnant trading conditions in the construction segment. The quarter-ending price for PVC FOB Texas in the USA reached USD 679/MT. In anticipation of a price hike due to a new import tariff, buyers temporarily suspended their purchasing activities during this period. Additionally, international factors, such as the Russia-Ukraine war and a drought affecting the Panama Canal, added complexity to the USA's international container logistics in the final quarter of the year.
In response to a substantial drop in spot export prices compared to contracted prices, US buyers were engaged in active discussions regarding potential reductions in VCM prices. The disruptions in US shipping caused by Panama Canal issues and the ongoing decline in crude oil values also played a role in influencing pricing dynamics in the North American VCM market during this timeframe.
Asia
The fourth quarter of 2023 presented challenges for the Vinyl Chloride Monomer (VCM) market in the APAC region. The market encountered several significant factors that influenced prices and market dynamics. Initially, there was a restricted supply of VCM, leading to heightened competition among buyers. This limited supply stemmed primarily from plant shutdowns, including the maintenance plant shutdown at Formosa Plastics Corporation in the USA, resulting in a reduction in VCM production capacity. Secondly, VCM demand ranged from moderate to high, driven by seasonal consumption in the construction and packaging industries in October 2023. The festive season in India, in particular, contributed to increased procurement activity. However, the VCM market faced subdued demand in the downstream PVC industry across the Asian market during December and November 2023 driving down the VCM prices. The prevailing downstream production uncertainty dampened earlier expectations of an upswing in demand, resulting in sluggish consumption in the domestic market. As a consequence, VCM sellers grappled with narrow profit margins in the terminating quarter of 2023. Traders acquired purchases at reduced prices, and the overall transaction scenario remained unsatisfactory. Additionally, there has been a significant drop of over 3% in international crude oil futures. The most recent price of Vinyl Chloride Monomer (VCM) CFR Tuticorin in India for the current quarter was USD 660/MT in December 2023.
Europe
The VCM prices in the European market showed a decline in the fourth quarter of 2023. The European VCM traders and manufacturers were predominantly concentrated on the diminished demand from the downstream PVC industry. This focus has led to only modest price fluctuations, despite worries about disruptions in freight at the termination of the quarter. The prolonged transit time for imports was a significant factor, as noted by a resin producer. Another significant factor was the adequate availability of inventories, which further impacted the prices negatively. Germany saw the most significant changes in prices, with a bearish trend in most of 2023. The strategy of reducing operating rates to protect profit margins for producers and traders proved insufficient for suppliers to boost margins, given the competitive pressures from the import market. Despite production cutbacks, VCM supplies consistently struggled due to low PVC demand in Q4 of 2023. The European VCM market notably outperformed its global counterparts, leading import suppliers to redirect shipments to the region during the global market downturn in November 2023.
For the Quarter Ending September 2023
North America
During the third quarter of 2023, the Vinyl Chloride Monomer (VCM) market experienced a significant price decrease amidst weakened international demand and an excess of stock, and the initial half of the quarter witnessed a consistent decrease in offers due to sluggish overseas buying interest and subdued local market activity. Additionally, the decline in North American VCM prices was further exacerbated by plant shutdowns in downstream PVC-producing units in August 2023. The diminishing PVC industry offtakes for VCM in Asian markets played an important role in shaping this negative market outlook for the US VCM price momentum. Simultaneously, industry insiders responded by reducing production run rates in response to abundant supplies in the US market and buyer reluctance, driven by expectations of further price reductions. In September 2023, the US VCM market continued to face challenges stemming from lackluster international sales and an oversupply of the product. Traders resorted to selling below producer price levels, exacerbated by surplus stocks, particularly within the sluggish downstream PVC industry. Consequently, a substantial drop in overseas offers and weak regional demand emerged as the primary driving factor behind the significant VCM price slump in the US market. Furthermore, according to data from FRED, the producer price index continued its descent from the previous month, standing at 319.62 in September 2023.
APAC
The VCM prices in the Asian market were upward in the quarter ending September 2023, governed by the inclination in the import prices amidst a limited supplied market to fulfill current demand in the regional market. Meanwhile, the market participants are pitching a surge in downstream procurement activity ahead of the festive season during the Q4 of the year in India. Recently, the purchasing enthusiasm in the Asian market was heard to be limited, with traders selling material below producer price levels for the time being. The VCM prices were primarily driven by the cut in the production rates in the exporting countries, including the USA and Japan. The maintenance plant shutdown at Formosa Plastics Corporation in the USA, with a total VCM production capacity of 653,000 mt/yr, shifted the VCM price trend significantly with an increment in the costs of inflow of imports. Meanwhile, the VCM price trend revived positively this month amidst a rise in seasonal consumption in the downstream segments and high production costs. As per the data released by the government of India, The CPI was observed to be falling marginally during the previous month and assessed as 186.2 (August 2023) in comparison to July, further showcasing similar market sentiments for September.
Europe
During the third quarter of 2023, the European VCM market experienced a period of price stability. As regional participants returned from their summer vacations, regional buyers engaged in cautious pre-purchasing activities while manufacturers briefly maintained VCM prices at a modest level. The PVC industry faced procurement challenges in August due to high-interest rates, which had a negative impact on VCM consumption in the first half of the quarter. In September 2023, upstream Ethylene prices saw a gradual increase, reflecting the rising crude oil futures, thereby adding cost pressures for VCM producers. Inflation further complicated production concerns, driven by the European Central Bank's interest rate hike to combat inflationary pressures. Given these challenges, sellers in September 2023 chose to keep commodity prices relatively low to moderate. The downstream PVC market experienced minimal price fluctuations in September, prompted by steady downstream construction demand, consistent international inquiries, and low inventory levels. Domestic buyers adopted a wait-and-see approach, leading producers to reduce inventories at lower profit margins. Economic and geopolitical uncertainties, as well as tightening financial conditions, negatively affected demand, with the economic sentiment index in the Eurozone gradually declining during this quarter.
For the Quarter Ending June 2023
North America
VCM prices experienced a decline in the second quarter of 2023 due to a combination of factors. Weak demand from the PVC manufacturing industry, along with lower upstream Ethylene prices, played a role in this decline period. The slowdown in residential construction in the United States also contributed to the reduced demand for VCM in the PVC sector. The overall performance of VCM was affected by the decrease in sales and profit for PVC producers, as well as the challenging global economic environment and other macroeconomic factors during this quarter. In the first half of the second quarter, rising interest rates were implemented to combat inflation in the country, which had an impact on the downstream PVC industry. Despite the reduced production run rates faced by major producers like Formosa Plastics Corp. USA and Westlake Corp., the demand for PVC remained steady. The restrictive financial conditions and inflation rates led to a decrease in consumer purchasing power across various sectors and influenced the discussions of VCM in the US market during this time frame.
Asia
Based on the latest data, the prices of VCM in the APAC market experienced a decline during the second quarter of June 2023. This was mainly due to concerns among market participants about the subdued demand in the PVC production sector within the country. The Slow economic recovery led to reduced consumer buying enthusiasm in the domestic market of India. Additionally, muted offshore trading activities further impacted the pricing movement of VCM during this quarter. The decrease in VCM prices was also influenced by the fluctuations in upstream crude oil prices and lower feedstock Ethylene costs in Q2. As a result, manufacturers chose to reduce production run rates due to the bearish market conditions in the latter half of the quarter. During the first half of Q2, the downstream PVC processing industry faced a decline after the Holiday season in China, and the export demand also decreased. Furthermore, rising interest rates prompted the PVC industry's offtakes across the regional market for VCM. Traders continued to experience an oversupplied market since the Labour Day Holidays in May 2023, which was exacerbated by the drop in crude oil costs and weak export demand.
Europe
VCM prices in Europe experienced a decline during the second quarter of 2023. This was primarily due to reduced demand in downstream sectors, including the PVC manufacturing segment. The demand for VCM in the PVC industry was affected by a significant drop in construction activities, which was further exacerbated by increasing interest rates that led to reduced consumer spending throughout the quarter. To navigate this challenging period and financial stress, market players implemented various strategies such as reducing production rates, optimizing costs, and ensuring a stable supply chain. Additionally, the decrease in VCM prices was also influenced by lower upstream Ethylene costs during this timeframe. On the export demand side, the economic slowdown amidst restrained investments, rising debt vulnerabilities, and funding shortages in the regional market restricted the international market momentum of the product. Conclusively, the slow downstream PVC market movement in the European market amidst muted demand fundamentals restrained the VCM price trend significantly in the Q2 of 2023.
For the Quarter Ending March 2023
North America
The price of VCM in the USA demonstrated a declining trend in the quarter ending March 2023 due to falling demand from the downstream PVC manufacturing segment throughout the Q1 of 2023. The abundant inventories and weak demand in the downstream construction industry and other competitive industries affected the prices of VCM during this period. Rising interest rates and gloomy client purchasing attitudes hindered VCM offers in the US market. While PVC prices were falling, the VCM businesses also faced competitive cost pressure on the local US market, and at the same time, affected the commodity's final negotiations this quarter. Additionally, due to the volatility in upstream crude oil prices, the vinyl monomer value chain saw input cost pressure at the end of the first quarter of 2023.
APAC
In the quarter ending March 2023, VCM prices in Asia showed an upbeat trend with a pickup in downstream momentum while competitive offers and a shortage of inventories pushed commodities prices higher. Due to volatile crude oil prices in the APAC market, the VCM market is influenced by the high costs pressure, elevating prices this quarter. At the end of March 2023, consumer sentiments varied because of negotiable freight charges amidst a bearish market situation across the globe. Therefore, a surge in demand from the construction sector as a result of expectations of higher housing segment consumption in the Asian market was the key factor for VCM discussions this quarter.
Europe
In addition to a recent reduction in the price trend at the end of March 2023, the German VCM market had a persistently bearish price trend in the quarter ending in March 2023. VCM prices in Germany were down as a result of weak demand from the construction sector and a decline in downstream PVC business activities. The expense of living crisis and the increase in interest rates influenced the commodities market this quarter amidst financial stress amongst consumers in the European region. Moreover, the VCM discussions for April were affected by the cheap imports from Turkey and other European countries due to anticipated weak demand in the downstream PVC-producing industry and piled-up inventories. Meanwhile, due to high inflation and insufficient economic growth, players in the European market were limited to trading only for the fulfillment of necessities during the Q1 of 2023.
For the Quarter Ending December 2022
North America
The VCM (Vinyl Chloride Monomer) prices showed a downward trend throughout the Quarter ending December 2022, owing to the sluggish downstream offers from the PVC-producing industries amid a decline in the real estate market of the USA and steady overseas inquiry of the commodity. Higher mortgage rates weighed on the downstream PVC offers and led to curtained downstream production activities in the region. Low demand and ample stocks led to a maintenance shutdown in Formosa Plastics in Baton Rouge (USA) in December and November for ten days in this Quarter. The potential recession and low downstream consumer confidence affected the VCM market substantially in the fourth Quarter of 2022.
APAC
The VCM (Vinyl Chloride Monomer) prices showed a plunging trend in the Q4 of 2022 in the APAC region due to ample inventories and muted consumer demand from the downstream PVC manufacturing segment. The VCM price dropped in the Asian market amid bearish domestic downstream PVC offers and dampened export offers. Moreover, the cheaper imports in the region and ease in the feedstock Chlorine costs affected the price momentum of VCM. Meanwhile, low down demand and surplus stocks have led to maintenance shutdowns in Hanwa Chemical and LG Chem of South Korea in November and December, diminishing the downstream PVC offers for the commodity in this Quarter.
Europe
The European VCM prices showed a downward trend in the Quarter ending December 2022, owing to the weak demand from the downstream PVC production industry. The rising inflationary pressures impacted the end-user PVC consumption for the commodity negatively and lowered buying sentiments in the regional market throughout the fourth Quarter of 2022. Meanwhile, downstream offers for VCM in the PVC manufacturing industry remained constrained due to labor shortages and slowed economic conditions in the European region. The escalating cost of living across the region squeezed the market activities in the real estate sector, impacting the PVC demand for the product. Moreover, the eased feedstock Chlorine prices affected the cost of the product.
For the Quarter Ending September 2022
North America
Vinyl Chloride Monomer (VCM) prices demonstrated a tumbling trend in the third Quarter of 2022. The weak demand from the downstream PVC manufacturing and high energy prices were considered factors for the downward price movement of the commodity in this Quarter. The sluggish housing rate in the region affected the downstream PVC of domestic offers for the product. Moreover, the downstream PVC offers dropped amidst surplus availability of inventories and weak upstream feedstock Ethylene support with the upcoming winter season in the Quarter ending September 2022. In addition, the tensions on the west coast port have also contributed to the declining commodity trend in the North American region.
APAC
Due to lower downstream consumer confidence in the PVC manufacturing industry, Vinyl Chloride Monomer (VCM) prices dropped in Q3 2022. Adequate inventory availability and crippled overseas demand fundamentals have resulted in the cut in production of downstream PVC in this Quarter. High inflation pressured the downstream enterprises to make sales at lower margins in the local market. Additionally, the rise in market uncertainties and port congestion due to wages dispute has led to a dip in the buying sentiments in the region during the third Quarter. Prices of VCM settled at a downward trajectory in the third Quarter of 2022, with a commodity price ease of 11% in September in the Indian market.
Europe
Europe witnessed stability in the prices of Vinyl Chloride monomers (VCM) due to weak demand from the downstream PVC industry. Persistently, the elevation in the inflation rate caused upward pressure on the downstream market players in the European region. In addition, labor strikes and a rise in production costs amidst the energy crunch weighed on the consumption of the commodity. Shortage of upstream energy in the region due to hampered Russian supplies also conclusively impacted the product's price. The rising inflationary input cost pressure and weak domestic market sentiments led to a steady price momentum of VCM in the regional market.
For the Quarter Ending June 2022
North America
Vinyl Chloride Monomer (VCM) prices remained firm during Q2-2022 across the North American region, owing to the firm offtakes from downstream PVC manufacturers. With the critical shortage of feedstock Ethylene in the USA, prices of downstream derivatives, such as Ethylene Dichloride, rose effectively in Q2, ultimately leading to a rise in VCM prices in June. Moreover, the increase in demand from the primary downstream PVC sector and the high inflation rate led to a surge in the price movement of VCM. The costs of VCM showed significant inclination in the US market due to increased energy values amid inflation in June.
APAC
Due to high feedstock Ethylene costs, Vinyl Chloride Monomer (VCM) prices surged in Q2, 2022. Inadequate inventory availability and crippled overseas raw material supply resulted in escalated production cost of Vinyl Chloride Monomer in this Quarter. High inflation pressured the downstream enterprises to fulfill the desired market requirement by passing the cost burden to consumers. Additionally, bullish energy values due to ongoing heat waves in the region influenced the prices of Vinyl Chloride monomers. Moreover, several planned maintenance shutdowns in Gujarat chemical plants also caused a rise in the prices of VCM in Asia. Prices of VCM settled at an upward trajectory in the Second Quarter of 2022.
Europe
Europe witnessed a rise in prices of Vinyl Chloride Monomer (VCM) due to firm demand from the downstream PVC industry. During this Quarter, elevation in the inflation rate caused upward pressure on the downstream enterprises in the European region. In addition, logistic issues and a rise in production costs also escalated the prices of VCM. Moreover, lower imports from the USA also remained a significant concern for the traders in Europe. Effective shortage of upstream crude oil in the region due to War also conclusively impacted the product's prices. Additionally, the conflict between Russia and Ukraine elevated the energy values in the region. Costs of VCM saw a rising trajectory in the European countries amid high inflation in the Second Quarter of 2022.
For the Quarter Ending March 2022
North America
Vinyl Chloride Monomer (VCM) prices remained firm during Q1-2022 across the North American region, backed by firm offtakes from downstream PVC manufacturers. Amid a critical shortage of upstream Ethylene in the USA, prices of downstream derivatives, including Ethylene Dichloride, rose effectively in Q1, which ultimately led to a rise in VCM prices. Besides, increased demand for VCM from its primary downstream PVC sector led to a surge in the prices of VCM. The offtakes effectively improved month over month during this quarter, contributing to the rise in prices. The prices of VCM were assessed at USD 1311/ MT during the final week of the first quarter in the USA.
Asia Pacific
Vinyl Chloride Monomer (VCM) prices surged in Q1-2022 due to high feedstock Ethylene costs. Insufficient supply of raw material resulted in increased production cost of Vinyl Chloride Monomer and created pressure on the downstream enterprises to fulfill the desired market requirement. Additionally, bullish energy costs influenced the prices of Vinyl Chloride in Asian region. Crude oil prices soared throughout the quarter, refineries using Naphtha as cracker feed remained under pressure from exorbitant feedstock prices of Ethylene. Moreover, several planned shutdowns in feedstock Ethylene chemical plants also consequently resulted in rise in prices of VCM in regional market of Asia. Prices of VCM were averaged at USD 1471 in China in the first quarter of 2022.
Europe
Europe also experienced a rise in prices of Vinyl Chloride Monomer (VCM) as a result of firm demand from downstream PVC manufacturers. During this quarter, prices of all the downstream derivatives of Ethylene rose due to persistent shortage. In addition, logistic issues and a rise in production cost also escalated the upward price trajectory of VCM along with its downstream PVC across the region during this timeframe. Moreover, lower imports from the USA also remained as a significant concern. It also induced an effective shortage of upstream in the region. Additionally, energy prices also escalated amid the ongoing Russia-Ukraine conflict. Prices of VCM were assessed at USD 1383 FOB Hamburg in Germany in the month of March.
For the Quarter Ending December 2021
North America
In North America, Vinyl Chloride Monomer (VCM) prices remained mixed witnessing surge in October-November while turning bearish by the end of the quarter. In October, Formosa Plastics USA uplifted force majeure which positively impacted the consumption of the product in the regional market. VCM prices fell in December due to its reduced consumption in PVC units owing to the seasonal dullness in demand and power disruption in some of the plants as a repercussion of a major tornado in early December. Westlake Chemicals, a major manufacturer of VCM and PVC lost power which hampered its production activities till mid-December. VCM values finally settled at USD 1348 per MT FOB Louisiana.
Asia
After witnessing astonishing rise in October, Vinyl Chloride Monomer (VCM) prices showcased a drastic fall in November-December period. Discussion of Vinyl Chloride Monomer (VCM) turned soft in India as its offtakes reduced from several downstream segments in line with the fall in inquiries post the festive season. In October, buyers restocked material under the expectations of rise in demand from polymer sector, however contrary to the scenario in the previous year, demand from polymer industry eventually stabilized in a shorter span of time. As VCM is a majorly imported commodity, reduction in import offers from Qatar and Germany led to a significant fall in its prices in Q4. Besides, drop in demand from end-use PVC segment in December majorly caused a decline in its consumption which led to higher inventory levels. Amidst the narrowed demand and supply gap, VCM prices in India dropped down to USD 1345 per MT in December.
Europe
Europe also encountered a surge in the prices of Vinyl Chloride Monomer (VCM) during the fourth quarter of 2021, owing to the extended shortage of the product in the regional market. The exorbitant shortage of VCM compelled Vynova, a major PVC producer to operate both its units at less than 50% efficiency. Although the availability of VCM started levelling by late-November, its prices continued to climb to the energy crises in Europe which led to higher plant operating cost. VCM after witnessing consistent surge in Germany settled at USD 1280 FOB Hamburg in mid-December.
For the Quarter Ending September 2021
North America
In North America, Vinyl Chloride Monomer (VCM) prices observed a steep rise during this quarter, backed by firm demand from downstream PVC manufacturers. In addition, hike in the values of upstream Ethylene also supported the pricing trend of VCM. Moreover, Ida hurricane made landfall at port Fourchon, Louisiana in August end due to which several manufacturers were compelled to shut down their production capacities that further impact the prices of VCM. Westlake chemical declared force majeure on VCM and downstream PVC on August 31 due to power outages. Similarly, Formosa, also imposed a turnaround at its VCM production plant as a repercussion of Ida hurricane. Amid critical shortage in USA, prices of Vinyl Chloride Monomer and its downstream derivatives rose effectively during the timeframe.
Asia
In Asia, a steep rise in the prices of Vinyl Chloride Monomer was observed during the third quarter, backed by the constraint availability and sturdy demand from downstream sectors. Supply of VCM and its downstream PVC tightened in the Asian as well as international market after the arrival of Ida hurricane in August in the USA. Crippled supply of raw materials led to the surge in the VCM prices during this quarter. As VCM is primarily imported in India, its prices gained tremendous values due to lower imports from China and US following host of supply challenges in these two countries. Moreover, exorbitant shipping charges and availability of containers further sent ripples to the prices of VCM in India. CFR-Tuticorin prices of VCM traced uptrend from USD 1118.66/MT to USD 1212/MT in the July-September timeframe in India.
Europe
Europe also encountered a surge in the prices of Vinyl Chloride Monomer (VCM) during the third quarter, followed by the solid demand from downstream PVC industry. In this quarter, pricing trend of VCM in the European market was a spillover effect of the scenario in the international market. Moreover, supply shortage due to lower imports and high freight charges also contributed to the hike in the prices of VCM. FD Hamburg VCM monthly average prices stood at USD 1125/MT in September showcasing a marginal spike by USD 30/MT since July.
For Quarter Ending June 2021
North America
Vinyl Chloride Monomer (VCM) prices witnessed consistent increment during this quarter across North America region, backed by firm offtakes from downstream PVC manufacturers. Amid critical shortage of upstream Ethylene in USA, prices of downstream derivatives including Ethylene Dichloride rose effectively in the time period which ultimately led to arise in VCM prices as well. Besides, revival in economy after successful vaccination drive, increased the demand for VCM from its major downstream PVC sector. The offtakes effectively improved month over month during this quarter, which fairly contributed to the rise in prices. Therefore, prices of VCM were assessed as USD 1106/MT during the final week of the quarter in the USA.
Asia
A mixed demand supply outlook was observed in the Asian market for Vinyl Chloride Monomer (VCM) during this quarter, where the demand for VCM varied country over country. Major manufacturers in China, experienced firm to stable demand for VCM from PVC manufacturers, as the economic activities effectively recovered from the pandemic, which increased the demand for PVC in the domestic market. While in India, prices fluctuated with resurgence of pandemic cases in the country, that reduced the offtakes from downstream PVC manufacturers during the month of May. Later, as the demand increased during the second half of June, prices rebounded effectively. Therefore, prices of VCM rebounded from USD 1362/MT to USD 1397/MT in the May-June timeframe in India.
Europe
Europe also experienced a steep rise in prices of Vinyl Chloride Monomer (VCM), backed by firm demand from downstream PVC manufacturers. During this quarter, prices of all the downstream derivatives of Ethylene rose due to its shortage. In addition, logistical issues and rising production cost also escalated the upward price trajectory of VCM along with its downstream PVC across the region during this timeframe. Moreover, lower imports from USA also remained a major concern, as it also induced an effective shortage of upstream in the region.
For the Quarter Ending March 2021
North America
Winter storm disrupted the production activity of North America during Q1 2021, exerting pressure on chemicals prices as the demand for most of the chemicals remained firm. But in case of VCM, production of PVC remained very low and demand for VCM is directly proportional to the production of PVC, which remained halted. Thus, the VCM demand remained low throughout the quarter, Hence VCM prices faced a downward trend after January 2021 and settled at USD 1180 per MT during March, which were previously observed at USD 1220 per MT during January 2021.
Asia
In Asia, prices for VCM encountered an upward trend during January and February which later came back to value lower than in January. Chinese lunar holidays created a temporary shortage across the region which supported the price of VCM in the global market. Later during March when production resumed to its normal and inventory levels got restabilised, prices followed downward trajectory in the Asian market. In India, price of VCM dropped down to USD 900.77 per MT in March which was observed as USD 918.14 per MT during January 2021.
Europe
Europe faced shortage of PVC and VCM chemicals due to lower imports from USA during this timeframe. While the market supported the prices of PVC across the region due to strong demand and insufficient supply, but VCM demand remained on low pace due to lower production activity hence the average prices maintained its value throughout the quarter.
For the Quarter Ending September 2020
North America
The supply of VCM remained snug throughout Q3 because of power outages heard across the production units, forcing manufacturers to stop on-site production. Hurricane Laura forced shut down of the Westlake chemical’s pair of VCM plants with a cumulative capacity of 952.5 KTPA since Aug. 27, thereby impending a huge drop in the region’s production levels. The availability of VCM for export was restricted despite a substantial rise in the global demand for PVC. Supply tightness and robust demand pushed up the VCM pricing curve which reported new hikes during the third quarter.
Asia
In Q3 2020, the demand for VCM edged up with strong PVC demand which witnessed a sharp uptick as most of the countries announced a gradual lift in restrictions over the construction activities imposed during Q1 and Q2. India and other South Asian countries started importing and manufacturing VCM to meet the growing demand of PVC resin from the downstream construction and manufacturing sectors. CFR India offers were raised to around USD 870 per tonne, tracing an expected uptrend. Japanese demand for the VCM rose to the year’s high in July driven by high volume exports. A leading Japanese PVC producer Shin-etsu Chemical registered strong demand from the US and Canada, buoyed by higher usage of building material for home maintenance.
Europe
The European VCM market in Q3 witnessed tightness due to planned and unplanned outages creating potential shortage in the product supply. VCM production site of INOVYN at Rafnes, Norway was taken off-stream due to technical issues prevailing in the plant’s operations. Supply tightness was heightened by the immediate shutdown of the reactor of Spolana’s Elbe Neratovice plant. Increased demand for PVC brisked the trading activity across European ports. The region’s VCM consumption witnessed a double-digit decline in Q2 because of the coronavirus-related lockdowns. However, sentiments were upbeat moving into Q3 buoyed by pick up in the construction sector.
