European PVC Export Prices to CIS Markets Remain Constant Since November

According to the ICIS-MRC Price report, European polyvinyl chloride (PVC) producers havce rolled over December export prices for January shipments to CIS countries due to steady ethylene.

The ethylene contract price for January was agreed based on the previous month's rates, indicating that the net cost of PVC production remained stable. As a result, ethylene prices in the region have remained stable for the second month in a row.
The demand for resin in Europe remained strong, including some export markets, which kept prices high.

Most producers carried PVC prices for January shipments over December, corresponding to November levels.

Due to scheduled and unscheduled maintenance shutdowns and lower imports, Europe experienced a PVC shortage throughout 2021.
PVC prices are influenced by several factors, the most important of which are supply-demand fundamentals and production costs, though the inherent link to chlor-alkali complicates matters. Aside from this, other factors along with the value chain influence PVC prices. The price of PVC is influenced by crude oil, natural gas, and coal. Cracker feeds to produce ethylene, one of the essential building blocks for PVC, are naphtha derived from crude oil and ethane derived from natural gas.

The supply of PVC has steadily increased in the market for the past two months, but it is far from being saturated. Furthermore, disruptions in the work of certain producers remain like before.

In January, European producers retained the range of their export prices to €1,650-1,710/tonne FCA (free carrier), and did not want to adjust it for CIS countries in haste. This mainly matched the levels of November and December.

Notably, at the same time, the supply of PVC for shipments from the United States has grown substantially since December. As a result, the significant suppliers offered prices for February shipments  at $ 1,700/tonne CFR (cost and freight). Furthermore, plants continued to ramp up in the United States following Hurricane Ida, which caused the closure of ports in Louisiana and Mississippi.

PVC pricing is highly dependent on its supply. The sourcing of PVC considerably relies on adequate capacity, operating rates, production, inventories, and imports. The supply of PVC was globally constrained in 2021. The shortage had been a significant contributor to the rise in international prices, with scheduled maintenance, weather-related disruption, and declarations of force majorly adding to the pressure. In addition, the scarcity of containers and ships has exacerbated the situation, particularly in import-dependent regions.

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