US PVC Jan-Oct 2020 exports fall 9.5% on year: ITC

Houston — US exports of construction staple polyvinyl chloride were 9.5% lower from January through October 2020 compared with the same period a year ago, the latest US International Trade Commission data, released Dec. 8, showed.

The US shipped out 2.13 million mt of PVC from January through October, down from 2.53 million mt in the same time frame of 2019.

The US exported nearly 2.99 million mt in all of 2019, or 37% of about 8 million mt/year of US PVC capacity.

The decline illustrates limited export volume availability amid tight supply because of months of reduced upstream chlor-alkali rates exacerbated by two force majeure events Formosa Plastics USA and Westlake Chemical declared in August that remained in effect Dec. 8. Formosa's force majeure stemmed from operational issues, while Westlake's was declared after Hurricane Laura's Aug. 27 assault on its operations in Lake Charles, Louisiana.

In addition, strong domestic demand amid a housing construction boom has further limited export volume availability, market sources said.

The tightness is global. Market sources said supply was limited in Asia and Europe, amid turnarounds and three ongoing PVC force majeure events in Europe as well. "It is on all sides," a source said.

Another source said the squeeze was expected to last into early 2021. "Typically if we get a shortage, it will last for six weeks, maybe two months. I've never seen a globally traded product be this tight for this long a period of time," the second source said.

The squeeze has pushed US export and domestic PVC prices to all-time highs. Export prices were last assessed at $1,295-$1,305/mt FAS Houston Dec. 2, the highest since S&P Global Platts began assessing it in 1983.

Domestic prices were last assessed at 67-69 cents/lb delivered ($1,400-$1,521/mt), also an all-time high since Platts began assessing it in 2001.

Export PVC prices plunged to a 12-year low of $520/mt FAS in late April, when widespread coronavirus pandemic-related shutdowns and economic shocks crushed demand. Domestic prices also fell 8 cents/lb in April and May to 46-48 cents/lb ($1,014-$1,058/mt).

Both surged in May, however, as shutdowns eased and demand rose. Domestic demand, in particular, has remained strong for single-family housing, with consumers seeking stand-alone dwellings as working from home appears to be a longer-term trend than originally expected because of the pandemic.