PVC margins made historical high of US$ 675 per ton
Our Correspondent
PVC prices have increased to USD 1,080 per ton that takes PVC margins to an all-time high of USD 675 per ton.
‘We believe supply disruptions in the international market have caused a significant increase in PVC prices, BMA Capital Management Limited said adding Moreover, if supply disruption continues, we believe PVC margins may sustain at these levels in the short run.
The prices of PVC had witnessed a rising trend of US$ 55 per ton during early of this month that was supposed to affect the prices of PVC In the local market.
A market analyst said that this increase in prices of PVC was for the short term due to the gap between supply and demand in the international market. He said that after the lockdown, the demand had risen in the global market that led to an increase in the prices of PVC.
He further said that old stocks of PVC had depleted due to sudden demand and plants were shut down due to maintenance. This resulted in constraints in supply-demand in the United States (US) and buyers had switched towards the market of China.
READ Engropolymer increases the price of PVC
He said that the supply and demand situations would be maintained after a short while that would result in stabilizing prices of PVC in the global market.
He further said that price stabilization of PVC in the global market would also impact Pakistan. He said that there were chances that prices of PVC in Pakistan would come down in the coming months.
As per a recent market intelligence report issued by Platts, Westlake Chemical had declared force majeure on August 31 North American polyvinyl chloride and upstream vinyl chloride monomer, with widespread power outages and damage at its Lake Charles, Louisiana, complex leaving production offline for an indefinite amount of time, according to a letter to customers S&P Global Platts obtained.
The force majeure condition had also resulted in supply disruptions and limit the ability of manufacturers to meet anticipated product demand.
The Engro Polymer Company Limited (EPCL) has recently increased its prices for polyvinyl chloride (PVC) ethylene, the chemical used to produce PVC pipes and other plastic products by Rs 20,000 per ton.
The EPCL increased prices due to a supply shortfall in the global market effective from October 15, 2020.
In Pakistan domestic prices had been witnessing rising trends in prices. Engro Polymer Company Limited the only PVC producer in Pakistan had made a hike in its prices by Rs22,000 per ton since the last week of August 2020 following an uptrend in the global market.
Sources told Newztodays.com that Engro Polymer has hiked prices of PVC by 522-525 Rs/bag effective October 15, 2020.
Following a fresh increase in prices, the new prices had jumped up to Rs 260,000 per ton against Rs 240,000 per ton.
Engro Polymer is now on the path to meet the total domestic PVC demand and export the surplus quantity as after its expansion company capacity will be increased to 293,000 tons. While talking to the Newztodays senior company official has told that we are targeting to bring capacity before the timeline communicated earlier due to a shortage of commodity globally.
When the coronavirus pandemic outbreak occurred, the world went on lockdown that resulted in distress in economic activities. Economic shocks gripped the world in April this year resulting in lowering the demand for PVC. The demand shrunk in the construction industry.
Pakistan had faced also faced an economic slowdown. However, the PTI government had announced a bailout package for the construction industry to revive the economic circle. This was aimed at generating employment for the lower class as well.
Following this, the demand for PVC in Pakistan also jumped up and EPCL had increased prices of PVC following higher demand.EPCL has also increased prices of PVC again which market experts term as a ‘short-term phenomena’ due to demand and supply issues in the global market.
