Petrotahlil : Formosa Plastics USA last month announced the company was seeking a 5 cents/lb price increase for domestic PVC in January, replacing a previous plan to seek a 3 cents/lb increase. Westlake Chemical, the fourth US PVC producer, has announced a 3 cents/lb price increase for domestic material in January, but had not announced an additional increase, a market source said on Wednesday.
Producers had sought 3 cents/lb price increases in December, but the domestic market resisted amid the seasonal winter lull in demand. Some market sources were skeptical that the January and February increases would be accepted, as that winter lull continues through those months, and they noted that the market may be more willing to pay higher prices in March when seasonal demand typically rises.
However, other sources said demand was seen gaining momentum with favorable housing statistics that could lead to an early push for buyers to stock up. In addition, weather forecasts show no expectations of severe flooding like what was seen in the upper US Midwest last year, which suppressed spring demand until early summer.
In addition, one of those other sources noted that limited export volume availability because of ongoing or upcoming turnarounds was seen boosting export pricing, "which is giving a little backdrop to the domestic price push."
Domestic PVC prices were largely stagnant through most of 2019, assessed at 50 cents/lb delivered, amid slow demand and a market that resisted price increases. Market sources said the January increases were being negotiated, and those talks were expected to wrap up by month's end, when market participants turn their attention to the February increases.
PLANT WORK LIMITING EXPORT VOLUMES
Westlake is working to start up a PVC expansion at its 272,155 mt/year plant in Geismar, Louisiana, which the company aims to start ramping up this month, limiting the company's PVC export volume availability. The output increase is expected to be the bulk of a 340,195 mt/year expansion of production at plants in Geismar and in Burghausen, Germany. The company has not specified by how much capacity of each plant will grow.
Formosa also has a February turnaround planned at its 798,000 mt/year PVC plant and an upstream 753,000 mt/year VCM unit at its Point Comfort, Texas, complex, and has been stockpiling volumes to fulfill contracts, leaving less export volume availability, sources said.
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Source : Platts