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US spot export PVC prices remained steady as of July 19, after news that Shintech’s Texas PVC operations were running at reduced rates due to a supply disruption of vinyl chloride monomer (VCM). Shintech’s 1.45 million mt/year PVC plant in Freeport, Texas, experienced reduced rates when its VCM supplier, Olin, shut down its nearby 835,000 mt/year VCM unit.

Formosa Plastics USA is expected to reduce export supply availability in August and September due to planned turnarounds at its PVC units. In Asia, PVC prices rose due to higher offers for August shipments. Meanwhile, US housing starts in June fell 8% from May, and average US 30-year fixed mortgage rates reached 6.96% on June 13.

On the back of a subdued spring, the US PVC market has seen a comparatively healthier uptake of products for July, with additional deals made at higher levels after the initial round of rollover offers. While these increased price indications, in addition to higher inquiries, show that the market is improving, participants have emphasized that demand is still soft. Sources pointed that the momentum gained in July, even if driven by tight supply, is a positive sign for Aug trading activity.

Formosa, Westlake and Shintech are set to increase from July (Formosa) and Aug to Sept respectively for the 3 major producers. Sources are skeptical this round of domestic increases would be accepted in full given the current soft state of demand.

Steady export pricing came following a healthy uptake of product on the bank of fresh July offers. Market participants said that despite the state of demand remaining relatively weak, tight supply and lower operating rates across the production chain allowed for a stable level of activity. Some sources had a bullish outlook for the 3rd quarter, referring to the level of activity and price stabilization as a possible turning point for the PVC market in the wake of a depressed spring.

Other sources displayed more caution, expressing low expectation for an Aug price increase due to (Click Here) July’s activity levels being in line with tighter supply rather than a renewed interest in product. In Asia, market pointed towards fresh Aug offers, with some sources citing form demand, particularly in India, as reason to believe Aug’s offers would see an increase.

Market sources said fresh offers for Aug would likely be increased, reflecting firmer demand in Asia, notably in India. Other sources said PVC demand was not very bullish with India seen to be healthy currently but such demand may slow down due to the monsoon season.

China’s PVC demand, would likely stay low due to slow economic recovery. The Caixin China General Manufacturing PMI came in at 50.5 for June, moderating from May’s 11-month high of 50.9.