For the Quarter Ending September 2023

North America

In the quarter ending September 2023, Polyvinyl Chloride (PVC) prices in North America showed positive momentum, predominantly influenced by limited stock availability. August 2023 witnessed a notable supply squeeze in the United States PVC market due to planned shutdowns and maintenance at major PVC plants. This resulted in a price hike, sparking concerns about volatility. Key players affected included Formosa Plastics, whose 753,000 MT/yr capacity plant in Texas closed for maintenance in August, and another 536,000 MT/yr unit in Louisiana underwent maintenance in September. Westlake Chemical Corporate also temporarily closed its 725,747 MT/yr VCM plant in Louisiana in September, impacting downstream PVC production. Shintech, a major PVC producer, planned a shutdown of its 890,000 MT/yr unit in October for maintenance. Despite disruptions, September 2023 PVC prices stabilized towards the quarter's end due to reduced demand from the construction industry and weak purchasing enthusiasm, influenced by limited inventories. A UAW strike affecting major automakers' production further contributed to decreased PVC demand in the USA, along with a decline in the construction sector's demand since August, affecting PVC market transactions in the last quarter of 2023.

APAC

The PVC price trend in the quarter ending September 2023 exhibited an overall upward trajectory in the APAC region, driven by increased demand from the construction sector and robust market activity mid-quarter. Multiple factors contributed to this surge, including expectations of heightened downstream construction demand. Escalating Calcium Carbide prices in China and soaring crude oil costs played a role in constraining PVC production rates, creating a bullish market environment. The impact of a disruptive typhoon event in August 2023 in China exacerbated supply challenges, leading to constrained regional PVC availability. In response, market players raised prices to protect profit margins, coinciding with a surge in international offers. However, by the quarter's end, PVC prices in the APAC region experienced a shift in a downward market momentum due to stability in demand and ample stock availability. This was supported by the stagnancy in procurement activities in the APAC construction industry. Sufficient stocks compelled traders and manufacturers to stabilize quotations in domestic and international markets by the end of September 2023.

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Europe

In the quarter ending September 2023, the European PVC market witnessed a relatively downward momentum in price dynamics. After regional participants returned from their summer holidays, cautious pre-purchasing activities briefly kept PVC prices at a modest low. Construction industry challenges in August, fueled by high interest rates, cast a shadow over PVC consumption in the first half of the quarter. Upstream EDC prices rose, mirroring the surge in crude oil futures, adding cost pressures for PVC producers. Mid-quarter, mounting inflation complicated production concerns, prompting the ECB to make a final interest rate hike to counter inflationary pressures. Despite these challenges, PVC sellers in September 2023 found renewed optimism. While the spot market initially lacked strong buying incentives, the need for restocking and attractive import prices reignited buying interest. In contrast, the PVC market saw marginal changes in September prices due to steady downstream demand, consistent international inquiries, and low inventory levels. Central Bank interest rate hikes paused, leading producers to reduce inventories at lower profit margins. Economic and geopolitical uncertainties, along with tightening financial conditions, stifled demand, and the economic sentiment index gradually declined in the Eurozone during this quarter.

Middle East Asia

PVC prices in the Middle East Asian region displayed resilience in the quarter ending September 2023, reflecting mixed downstream market conditions. In Saudi Arabia, PVC prices showed an upward trend since the start of the third quarter of 2023, driven by rising international offtakes amid a shortage of supplies and increased upstream crude oil costs. Domestically, PVC downstream demand remained strong in the construction industry, aligning with the booming construction segment and improved PMI in September 2023 in Saudi Arabia. Input price inflation for PVC increased in line with higher crude oil prices, elevating cost pressure on manufacturers to raise prices and pass the burden to consumers. Output charges continued to rise throughout the month. Additionally, the CPI in Saudi Arabia increased by 2.0% according to August data, and the PMI recorded 57.2 points in the latest Saudi data of September 2023, indicating a positive trend in business sentiments in the country.