US housing starts in April fell 30.2% from March to their lowest seasonally adjusted level since February 2015, US Department of Commerce data released Tuesday showed.
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Authorized building permits for new homes fell 20.8% from March, and home completions were 8.1% lower than those in March, the data showed.
The data exemplified the sharp decline in demand for polyvinyl chloride, a construction staple used to make pipes, window frames, vinyl siding and other products, as well as upstream products used to manufacture the resin.
US domestic PVC prices fell 5 cents/lb in April, wiping out price increases that had been accepted in February and March before the global coronavirus pandemic prompted widespread economic shocks from shutdowns and stay-at-home orders that left at least 35 million people without jobs, according to the latest US Labor Department data. Domestic PVC demand had been seen strong through mid-March this year.
Export PVC prices also fell sharply along with weak international demand, plunging 39% over six weeks to $520/mt FAS Houston on April 29, S&P Global Platts data show.
Export PVC prices have since partially rebounded, climbing $55/mt to be assessed at $575/mt FAS Houston on May 13, Platts data showed.
"We've seen some pullback in construction, largely driven by the stay-at-home orders by many of the stats domestically and some of the countries overseas," Westlake Chemical CFO Steve Bender said last week at the virtual Goldman Sachs Industrials and Materials conference.
He said construction activity slumped in the US Northeast, but remained firm in the Midwest and the lower half of the US. Westlake produces both PVC and building products made with it.
Bender said he expects PVC markets to strengthen as economies reopen in the US, Europe and Asia. India, a net PVC importer, imposed a lockdown on March 25 and on Sunday extended it for the third time to the end of May with eased restrictions.
"You're beginning to see demand for PVC pick back up, which is what we'd prefer to see," Bender said.
HOUSING STARTS, PERMITS, COMPLETIONS DECLINE
The federal data released Tuesday showed privately-owned housing starts in April reached 891,000, down 30.2% from 1.276 million in March and 29.7% lower from the April 2019 rate of 1.267 million. Single-family housing starts in April were 650,000, 25.4% lower 871,000 in March.
Privately-owned housing units authorized by building permits in April reached 1.074 million, 20.8% down from 1.356 million in March and 19.2% under the April 2019 rate of 1.330 million, the data showed. Single-family authorizations in April were 669,000, 24.3% lower from 884,000 in March.
Privately-owned housing completions in April reached a seasonally adjusted 1.176 million, 8.1% lower than 1.279 million in March and 11.8% lower 1.334 million in April 2019.
Single-family completions in April were 865,000, 4.9% lower than 910,000 in March, the data showed.