PVC rally set to gain momentum
Regional PVC players shared April expectations for another month, supported by strong upstream costs, disrupted import flow and lower prompt availability. The rally is likely to gain momentum, as producers intend to implement energy surcharges on top of a traditional cost pass-through of 50% from ethylene.
Barring stability in December 2021 and January 2022, PVC markets have seen an uninterrupted uptrend since June 2020. That is to say, spot markets will break their previous record, as has been the case almost each month since January 2021.
In March, PVC deals were closed with €45-50/ton hikes in most cases Producers aim to apply energy surcharges starting from April, while the size of these hikes is not clear yet amid high volatility. A regional supplier was even planning to revise the surcharge weekly rather than making a monthly announcement.
On the demand front, converters could only meet their regular needs as they could not get extra volumes from their suppliers ahead of April hikes. Many manufacturers confirmed a slowing demand during March, adding, “New order entries reduced due to overrated prices. We have been clearing backlog orders this month.”
Buying activity will remain cautious, despite seasonal patterns, under the shadow of inflationary pressures.There is a slowdown in the construction sector causen not only by rising plastic resin prices but also due to shortages and soaring prices of other materials.
News source: chemorbis.com