US PVC prices rise for first time in 9 months
US contract prices for polyvinyl chloride (PVC) increased in January for the first time in nine months, driven by rising export prices and tightening domestic supplies.
US PVC contract prices increased in January to 65.5¢/lb, up by 1¢/lb from December and the first increase since April 2022 when contracts settled at 96.5¢/lb.
Prices began to tumble last year in July, when contracts fell by 5¢/lb and then continued to fall by 5-6¢/lb each month for rest of the year.
January's modest reversal came as export prices have begun to rise in the new year, domestic supply has tightened somewhat, and US demand has stabilized, albeit at a low level.
Rising export prices was the top justification producers cited in seeking higher contract prices. Export prices out of the US had been falling since the summer alongside domestic prices, reaching a low in early December of $610-700/t fas Houston, down from $1,680-1,730/t in early July. Export prices through January held above $700/t and rose in early February to $830/t-$900/t.
Export prices don't track domestic US prices in a precise and equal manner, but the export market's function as a US PVC spot market allows price trends to influence the domestic price.
Domestic demand has stabilized, albeit at a depressed level. Much of the market now views the November-December window as the bottom of negative demand trends seen in 2022. Many producers are reporting a bounce back in ordering, even as many buyers see a more mixed situation.
One buyer this week said January activity improved by 15pc compared to December, and other buyers have begun restocking for the expected demand uptick that comes with the spring building season. But hesitation in the market remains, and multiple buyers still report high inventories in their systems, a key reason January prices didn't rise more.
Questions remain about the approaching peak building season in the US, as the price declines of 2022 were driven largely by a weakening US housing market. Home sales, home construction, and private construction spending all deteriorated in the second half of 2022 as rising interest rates implemented by the Federal Reserve to combat inflation began to have an effect, dampening the confidence of home builders and instilling hesitancy in much of the construction-orientated PVC market.
Meanwhile, supply tightened as producers cut inventories towards the end of the year. This tightening was primarily on the export side as some producers pulled export offers for January and February. The domestic supply market has been less affected, but planned maintenance among multiple producers in the next few months could begin to encroach on domestic supply, just as seasonal demand begins to rise.
Producers have pushed for a total increase of 10¢/lb over the course of the first quarter, citing the recent market shifts. But in every case, domestic buyers have said the shifts haven't been significant enough to justify this larger increase.
Related news posts
Japan’s NS United plans methanol-fuelled bulk carriers
Japan’s NS United plans methanol-fuelled bulk carriers
Tokyo, 15 May (Argus) — Japanese shipping company NS United Kaiun plans to order several methanol-fuelled Capesize bulk carriers, targeting to begin delivery from 2027, as its aims to reduce greenhouse gas (GHG) emissions from shipping raw materials for steel production. NS United Kaiun signed an initial agreement on 13 May with Japanese shipbuilders Imabari Shipbuilding and Japan Marine United and domestic vessel engineer Nihon Shipyard to build several methanol-fuelled ships of 209,000dwt each. The vessels will be equipped with dual-fuel engines, which can burn methanol and conventional marine fuel. NS United Kaiun expects the future use of green methanol will cut GHG emissions by more than 80pc compared with conventional marine fuel. The company will also co-operate with fuel developers to buy green methanol. Methanol has emerged as a potential alternative fuel as the marine sector looks to cut its GHGs. Fellow Japanese shipping firm NYK Line also plans to receive six chemical tankers over 2026-29, which will burn very-low sulphur fuel oil but will be designed to convert to use methanol. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Philippines' JG Summit delays cracker restart
Philippines' JG Summit delays cracker restart
Singapore, 14 May (Argus) — The Philippines' sole cracker operator JG Summit has delayed the restart of its Batangas cracker by another week because of technical glitches. The cracker was shut on 9 May on technical issues and was scheduled to restart over the weekend of 10 May, but this has been delayed again to the weekend of 17 May because of other technical glitches, according to sources close to the company. JG Summit's cracker has a nameplate capacity of 480,000 t/yr of ethylene and 240,000 t/yr of propylene. Toong Shien Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Daio Paper to explore biorefinery
Japan’s Daio Paper to explore biorefinery
Tokyo, 13 May (Argus) — Japanese paper manufacturer Daio Paper is planning a trial biorefinery, aiming to begin commercial production of sustainable aviation fuel (SAF), second-generation bioethanol and biodegradable plastic feedstock by the April 2032-March 2033 fiscal year. Daio, in partnership with domestic biorefinery venture Green Earth Institute (GEI), plans to develop technology to demonstrate manufacturing the bioproducts by 2030. Daio Paper plans to use wooden biomass, waste paper and paper sludge as feedstock. The company declined to disclose any planned commercial output capacity, as well as location of the biorefinery. The project is financed by Japan's state-owned research institute Nedo. Daio Paper is attempting to achieve decarbonisation, while weakening paper demand has forced the industry to seek new business opportunities. Fellow Japanese paper producer Nippon Paper has also tried to develop biorefinery technology with GEI, targeting to begin commercial production of bioethanol for SAF and petrochemical feedstock by 2027-28. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China, US pledge joint methane action at climate talks
China, US pledge joint methane action at climate talks
San Francisco, 13 May (Argus) — The US and China have pledged to further co-operate on methane reduction, among other topics, following a first meeting between the countries' new climate envoys in Washington during 8-9 May. The meeting follows video conferencing between the two sides in January under their "working group on enhancing climate action in the 2020s" initiative. China and the US reaffirmed their 2021 agreement to co-operate on reducing carbon emissions in the power generation sector, cutting methane emissions and boosting renewable energy in the " Sunnylands Statement on Enhancing Cooperation to Address the Climate Crisis " last November in San Francisco. China confirmed the appointment of Liu Zhenmin to replace Xie Zhenhua as the country's climate advsior in January. Liu's US counterpart John Podesta replaced John Kerry in January. Liu and Podesta discussed co-operation "on multilateral issues related to promoting a successful COP 29 in Baku, Azerbaijan" at the latest talks, the US state department said on 10 May. They also discussed issues identified in the Sunnylands statement, including energy transition, methane and other non-CO2 greenhouse gases, the circular economy and resource efficiency, deforestation,as well as low-carbon and sustainable provinces, states and cities. They plan to co-host a second event on reducing methane and other non-CO2 greenhouse gases in Baku and "conduct capacity building on deploying abatement technologies". It remains to be seen how the two new climate advisors will bring the two countries closer in climate negotiations. The Sunnylands statement and the close relationship of their predecessors were instrumental in bringing consensus at last year's Cop 28 UN climate summit in Dubai. China released a much anticipated methane plan last November, although Xie has flagged challenges with data monitoring in the sector. But China and the US have agreed to develop and improve monitoring to "achieve significant methane emissions control and reductions in the 2020s". China has also not signed on to the Global Methane Pledge to cut methane emissions by 30pc by 2030, from 2020 levels. The country's emissions may also rise more than expected after it redefined its meaning of energy intensity, according to the Helsinki-based Centre for Research on Energy and Clean Air. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more