James: Hello, and welcome to this "Argus Chemicals Conversation" podcast, the third episode in our K Show Plastics Preview series. Today we will be discussing the European PVC market. I am your host James Elliott and I'm joined by George Barsted, reporter European PVC. George will be representing Argus at the K Fair Düsseldorf in October for PVC. Today we'll be discussing some of the most significant evolutions in the market over the past few months and the key discussion points ahead of K Show. Hello, George.
George: Hi James.
James: George, what are the main talking points for the European PVC market ahead of K Show?
George: Thanks, James. So the main talking point would probably be the challenging market environment for European producers and the margin pressures they faced in 2025. Argus has calculated the margin for an integrated suspension PVC producer in Northwest Europe at around €230 per ton over the last few months. And this is down from 10-year average of around €346 per ton and a high of over €800 per ton at the end of 2021 and the start of 2022. Elevated energy costs have boosted the cost position whilst a combination of weak demand from end users, global over capacity, and cheaper Asian imports are all combining to put pressure on European prices and reduce margins.
James: So a tough environment. How have producers been coping in Europe this year?
George: So far in Europe it's been tough for producers. And in the last year or so we've heard announcements from a number of asset closures and multiple links for PVC producers. In Slovakia, at the tail end of last year, small producer Fortischem announced they were halting PVC production at their site, taking with them roughly 80,000 tons a year of suspension PVC capacity. At a similar time, a plant in Spolana in the Czech Republic also announced its closure, taking roughly 135,000 tons a year of capacity with it.
In July of this year, PVC producer Vynova announced the closure of its 225,000-ton-a-year site at Beek in the Netherlands, which is set to shut by November, 2025. The company stated at the time, the reason behind the closure was global over capacity, persistently weak demand and increased competition from regions with lower production costs and less stringent regulations, adding that they did not expect these conditions to improve in the short term. Despite these closures in Europe, weak demand has persisted and producers are still operating assets at lower than optimal rates owing to the tepid demand.
James: George, we've talked about the challenging market situation in Europe and that's been partly driven by the weak demand situation. Can you talk about the main demand drivers for PVC in the European market?
George: For PVC in the European market, demand is mainly construction-led, and the construction industry across the board has been in fairly dire straits in recent years and months. Demands of the construction sector was subdued during the summer as it usually is, and converters do not expect any sort of significant improvement in the industry in the autumn. The Handbook Commercial Bank or HCOB as it's sometimes known, construction purchasing managers index, also known as the PMI, which tracks activity in the construction sector showed a further contraction and construction activity within the Eurozone construction PMI records at 46.7 in August. And for context, any value below 50.0 represents contraction, any value above that represents expansion.
Building and construction represents about 70% of PVC demands, including into pipes and flooring, as well as window profiles, which is a pretty big area for it. House building and renovations are important too with window profile demands being a key end use. Sticky interest rates in Europe and the UK recently have seen a lack of investment in new builds and renovations. And with PVC demand generally coming later in the building process, it might be a while before demand appears to pick up for PVC in Europe.
James: What does all of this mean for PVC prices?
George: So contract pricing in most regions of Europe has so far been stable this year with no major market moves taking place. There is continued push from producers to regain margins against the ethylene costs, but this has come to little fruition. At the end of last year, we saw producers become more aggressive with contract pricing in attempt to regain some margins for the end of the year. Whether that will happen again after K Fair this year in 2025 remains to be seen, but demand is expected to be seasonally firmer in autumn than it was in the summer. However, there's been a bit of change in pricing on imported volumes.
James: What do you mean by that?
George: So at the start of this year, Argus was assessing our import prices on Sif Northwest Europe basis for suspension PVC at a midpoint of €855 per ton. At the time of recording this has now fallen down to €790 per ton. This is largely on the back of cheaper Asian material flowing into Europe this year.
James: Why have import prices come up this year, George?
George: So the European Commission imposed anti-dumping duties on suspension PVC from the U.S. and Egypt last year between 58% and 100% of the CIF import price. This has effectively cut off any U.S. and Egyptian material flowing into Europe. The UK also imposed similar anti-dumping duties on U.S. imports as well at a similar time. And as a result of this, traders have turned eastwards for volumes looking to flow into Europe. South Korea, Taiwan, and China have all been sending volumes to towards Europe.
The latest EUROSTAT data that we looked at for the first half of 2025 showed an increase in Asian PVC imports into Europe from those three aforementioned countries with total imports of 76,600 tons flowing from those countries mentioned during just the first half of the year. This was over double the amount reported in the same timeframe from those countries in 2024. U.S. imports have fallen in that time as Asian imports have effectively replaced them.
James: Thanks, George. Really insightful. How is the European market adjusting to this shift in trade flows?
George: Well, there's been some hesitancy from converters, as you can imagine, to take more volumes of suspension PVC from Asia, as some have concerns about lead times as well as quality about some of the material. More and more people in the value chain are beginning to take an increased volume from Asia, however, and looking at the expense of European producers. European producers have noted that the trade deals struck between the EU won't have any impact on the anti-dumping duties already in place, which provide some solace, but they are still not happy with losing volume on the cheap Asian material. One positive around European trade is domestic producers will continue to send emulsion PVC towards the U.S. who are net short for emulsion PVC production. Emulsion PVC demand in Europe remains weak with a stuttering automotive sector and a high finished goods imports depressing domestic production.
James: Thanks for that, George. It's going to be an interesting case show for the PVC industry, that's for sure. If you would like to meet with George to discuss PVC at K, please get in contact. We look forward to welcoming you and your colleagues to our K Show booth. Thanks for listening, and tune in next time for another episode of the K Show Plastics Preview by "Argus Chemical Conversations." Goodbye.
