Tight global PVC supply drives prices to 9-year highs

According to a report from Houston on September 18, 2020 by Petrochemical News, in April of this year, when production shutdowns and economic shocks caused by the pandemic swept through most parts of the world, the demand for building materials polyvinyl chloride (PVC) fell to the 2008 global financial crisis The lowest level since.

House construction activities are intermittent. PVC buyers retreat, while PVC sellers chase shrinking demand, but often in vain. Five months later, this is a completely different picture. The PVC price cuts in the United States and Europe for several consecutive months, demand recovery, and some force majeure have pushed PVC prices to multi-year highs. In a severely tight supply situation, buyers hope to obtain PVC raw materials for the manufacture of pipes, window frames, vinyl siding and other products.

A U.S. market source said: “There are really no PVC products on the market at the moment.” “A few come from Asia. But the prices are high. People now buy PVC products in their pockets instead of everywhere.”

U.S. PVC export prices fell 39% in 6 weeks, and fell to a 12-year low of US$520/ton at the peak of the closure of the Houston PVC plant on April 29. As the suspension of production eased, PVC prices began to rebound in May and reached a ship-side delivery price of US$800/ton in August.

Subsequently, two of the four PVC manufacturers in the United States announced in mid to late August that PVC was affected by force majeure. After April, no PVC manufacturer's prices have completely returned to normal due to changes in markets or concerns about the sustainability of demand improvement. By September 16, the price of PVC had doubled from the low of April 29, reaching a nine-year high of US$1,050/ton.