Formosa, Westlake double September domestic PVC price increase to 4 cents/lb: sources

Formosa Plastics USA and Westlake have revised their September domestic polyvinyl chloride price increases to 4 cents/lb from 2 cents/lb, sources familiar with the companies' operations said Aug. 16.

Both had previously announced 2 cents/lb price increases each for August and September. Their August increases remained at 2 cents/lb, but the revised September increases, announced Aug. 15 by Formosa and Aug. 16 by Westlake, push the total to 6 cents/lb over the two months, the sources said. Westlake's Aug. 16 customer letter announcing the increase -- seen by S&P Global Commodity Insights -- confirmed its revised September increase announcement.

The two companies' moves follows OxyVinyls' Aug. 11 announcement of a 4 cents/lb increase for September in addition to a 2 cents/lb increase for August.

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Shintech, the fourth US PVC producer, is seeking 2 cents/lb for August and September, a total of 4 cents/lb over the two months, according to sources familiar with company operations.

The companies did not respond to requests for comment.

A market source said the increases could be considered "weather insurance" as August and September are seen as the height of the June-November Atlantic hurricane season, when larger, more destructive storms can form in the Gulf of Mexico.

US PVC supply has tightened in recent weeks amid outages and turnarounds. Formosa's 753,000 mt/year PVC plant at Point Comfort, Texas, was shut for planned work through the second half of August, and the company planned to shut its 536,000 mt/year PVC unit at Baton Rouge, Louisiana, for planned work in September, sources familiar with company operations said.

Also, Formosa's 136,000 mt/year PVC capacity expansion at the Baton Rouge facility, which had been slated to come online by the end of September, has been delayed, though a new startup date has yet to be determined, those sources said.

Westlake plans to shut its 725,747 mt/year upstream vinyl chloride monomer plant at its Plaquemine, Louisiana, complex for maintenance in September, which sources said would reduce downstream PVC output. Shintech also aims to shut its Plaquemine complex in October for planned work, including the 890,000 mt/year PVC unit.

Those turnarounds were expected to reduce overall US PVC availability through November, which could support prices, sources said. However, PVC demand was seen sluggish through the rest of 2023, so prices could retreat when turnarounds conclude and supply normalizes, sources said.