Latin American PVC markets see record-high prices amid tight supply from US

Sao Paulo — Spot import PVC markets in key Latin American markets saw a jump in prices in the past months and reached record-high values for both Brazil and the West Coast of South America amid tight supply from US.

PVC price in Brazil was assessed at $1,460/mt CFR Brazil on Dec. 2, a record-high level since S&P Global Platts started the assessment in 2011. Traders in Brazil have said prices were up to $1,490/mt, still showing a continuous uptrend in the market.

Sources believe the market will be tight until at least the end of January.

Compared to the beginning of the year, in January, prices increased 68.8%, and jumped 114.7% when compared to May's values, the all-time record-low for the assessment.

From January to October, Brazil imported 277,146 mt of PVC, down 12.7% year on year.

Supply for Brazil is mostly available from Asia, Europe, Mexico and Argentina instead of the US, which is limited due to the anti-dumping duty. Prices from Asia and Europe have increased significantly in the past weeks, pushing CFR Brazil to numbers never seen.

Europe spot prices were assessed Dec. 2 at Eur950/mt FD NEW, a three-year high at this point, and was last seen above this on April 26, 2017. CFR Turkey spot prices for PVC were assessed at $1,360/mt, reaching a 12-year high, and was last seen above this level on Aug. 20, 2008.

In the WCSA, supply is mostly attached to the US market, which has had very limited volume since hurricane Laura affected the USGC region in late August. A combination of months of reduced rates, two force majeures still in effect -- Formosa Plastics USA and Westlake Chemical -- combined with strong US domestic demand left very little export volume availability in the past months.

US PVC prices were assessed on Dec. 2 at $1,300/mt FAS Houston, a new all-time high since S&P Global Platts began assessing PVC in 1983.

Market sources said they expect US supply to remain tight into the first quarter of 2021, as producers are expected to maintain reduced upstream chlor-alkali rates until caustic soda demand improves. That demand has been soft for more than a year, exacerbated by pandemic fallout on alumina and pulp and paper industries.

On the Pacific coast of South America, PVC prices were assessed at $1,400/mt CFR WCSA on Dec. 2, the highest value since Platts started the assessment in 2010. Compared to the beginning of the year, in January, prices increased 67.7%, and jumped 133.3% when compared to May's values, the all-time record-low for the assessment.

In terms of prices, the expectation is for a continuous uptrend, at least until more material becomes available from the US.