Engro Pvc resin price in Pakistan to go up further

Aftab Ahmed

Islamabad: Engro Pvc resin price in Pakistan are likely to go up as the upward trend in prices continues in the international market.

The Engro polymer and chemicals limited revises price of polyvinyl chloride (PVC) resin in Pakistan following fluctuation in global prices.

The prices of PVC went up to US$ 55 per ton last week, and its impact would reflect incoming month leading to in hike prices of Engro resin in Pakistan, market sources say.

The PVC shortage in 2020 is also causing rising trends with the recovery of the economy following the Covid-19 Pandemic.

In Pakistan, domestic prices have already followed the rising trend in PVC prices. Engro Polymer Company Limited, the only PVC producer in Pakistan, has increased its prices by Rs22,000 per ton since the last week of August 2020, an uptrend in international prices.

Engro Polymer and chemicals is now on the path to meet the total domestic PVC demand and export the surplus quantity. As after its expansion company’s capacity will be increased to 293,000 tons. While talking to the Newztodays senior company official, we aim to bring capacity before the timeline was communicated earlier due to a global shortage of commodities.

When coronavirus pandemic-related shutdowns and economic shocks gripped much of the world in April, demand for construction staple polyvinyl chloride careened to lows was not seen since the global financial crash 2008. Home construction activity cratered. PVC buyers recoiled, and sellers chased shrinking pockets of demand, often in vain.

Five months later, it’s a starkly different picture. Months of reduced rates, turnarounds, demand recovery and some force majeure on PVC in the US and Europe have pushed prices to multi-year highs. Buyers want the powder that makes pipes, window frames, vinyl siding and other products amid an acute supply squeeze.

Updated PVC prices in South East Asia increased to US$990/ton, and using Ethylene price of US$825/ton PVC current margins stands at US$590/ton. The PVC prices in the US increased to the US$1,050/ton mark due to lower availability of inventory at regional ports and force majeure declared by some major players domestically.

In International markets, US export PVC prices fell 39% in six weeks to a 12-year low of $520/mt FAS Houston on April 29 at the shutdowns’ height. Prices began rebounding in May as shutdowns eased, reaching $800/mt FAS by August.

Then Formosa Plastics USA and Westlake Chemical, two of the four US producers, declared force majeure on PVC in mid and late August. None had resumed fully normal rates post-April amid turnarounds or skittishness about whether improved demand sustained. By Sept. 16, prices had doubled from that April 29 low to $1,050/mt FAS, a nine-year high.

That supply tightness is global. In Europe, contract customers put on allocation amid low stocks. Inovyn, Europe’s largest vinyl producer, on Sept. 1, also declared force majeure on PVC from its Northern European plants.

In Asia, fresh October offers announced Sept 15 up to $130 per metric ton from September levels, and ex-Taiwan quantity heard at 40,000 mt sold out in a day.

Asian market said limited supply from the US sparked demand for Asia-origin cargoes. Still, FOB China offers heard at $980/mt were not workable on a CFR India/Southeast Asia basis.