October US PE, PVC contracts settle flat to lower on month after lengthy negotiations

Monthly contract prices for US polyethylene settled down 3 cents/lb in October, while US polyvinyl chloride CPs rolled over, amid shifting supply-demand balances for both polymers.

While contract settlements are always retroactive, negotiations extended beyond a typical window for October, according to market feedback. Platts, part of S&P Global Commodity Insights, assessed the monthly October PE CP delta at -3 cents/lb on Nov. 15, while the PVC CP delta for October was assessed at zero or flat to September..

PE suppliers were reluctant to accept a decline, but buyers held firm considering abundance in supply and soft demand, sources said.

Distributor sources said resin has been easily available, with one source commenting October demand was weaker compared to September. These weak market fundamentals and low US consumer confidence eventually led producers to reluctantly agree to the downward settlement in mid-November, according to one buyer source.

"[Working] off excess hurricane supply, election concerns, and wanting lower cost has held buyers to just want they need," the distributor source said.

Uncertainty around the US elections also played a role in PVC negotiations for October, sources said. Supply conditions were also considered uncertain, with some PVC makers completing turnarounds while another producer finished an expansion project in late October.

The October CP delta assessment reflected repeatable and corroborated indications of stable pricing or rollovers for the month.

One producer was heard to have announced a price increase of 3 cents/lb in October, which was not accepted by the market according to source feedback. Another PVC maker opted not to announce a hike due to the timing of scheduled maintenance, sources said, and no announcements were heard from the other two producers.

PVC producers highlighted stable demand throughout the month, with an emphasis on domestic activity rather than exports due to unfavorable conditions in international markets. The typical seasonal trend of demand softness during the winter months, usually attributed to reduced construction activity, was reported to be "minimal" this year. Sources said that this change was largely influenced by the Federal Reserve's interest rate cuts.

While some sources expressed concerns about a potential imbalance between supply and demand, others maintained a bullish outlook for the US PVC domestic market in the coming year, noting lower interest rates could stimulate demand for construction and home renovation. Additionally, some sources anticipated a rise in demand for PVC related to repairs and construction following the hurricane season.

North American PVC production totaled 1.356 billion lb in October, up 4.8% from 1.295 billion lb in September, per preliminary American Chemistry Council data. Total PVC sales in remained almost unchanged on the month, rising 0.3%.

Monthly industry-settled delta assessments for US domestic PE and PVC were launched Oct. 1 after the discontinuation of weekly contract prices earlier in 2024.