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US housing starts up in June, building permits down: Census Bureau

Highlights

Second consecutive month of lower building permits could signal cooling in housing boom

Domestic prices of construction staple PVC at all-time high

US housing starts in June rose 6.3% from May, while authorized building permits were 5.1% lower, possibly signaling some moderation looming in the country's housing boom that emerged in mid-2020, US Census Bureau data released June 20 showed.

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The data suggests continued strong domestic demand for polyvinyl chloride, a construction staple used to make pipes, window frames, vinyl siding and other products.

"Domestic is going like gangbusters," a market source said.

June housing starts reached 1.643 million units, up 6.3% from 1.546 million units in May, and up 29.1 from 1.273 million units in June 2020, the data showed. May data was revised down from 1.572 million units.

Authorized building permits in June reached 1.598 million units, down 5.1% from May's 1.683 million units, but up 23.3% from 1.296 million units in June 2020, the data showed.

The sharp year-on-year increases reflect lower construction activity in the immediate aftermath of the height of COVID-19 shutdowns in April and May of 2020.

May's data also showed housing starts rose from April levels, but building permits fell. Market sources said the second consecutive month of building permit declines could reflect a slowdown in building new homes amid high input costs and labor constraints.

Domestic PVC prices have gained 43.5 cents/lb ($959/mt) since June 2020 and were last assessed July 14 at 89.5-91.5 cents/lb ($1,975-$2,017/mt), an all-time high since S&P Global Platts began assessing the market in 2001.

That runup came in tandem with strong consumer demand for more space while working from home amid coronavirus pandemic restrictions. Supply also has been tight since August 2020, when the first of two hurricanes hit Louisiana that year. Sustained subfreezing temperatures that hit the US Gulf Coast in mid-February forced widespread weeks-long petrochemical shutdowns that sharply exacerbated that supply tightness.

Subsequent turnarounds and operational issues also have kept supply availability snug while inventories remain low, sources said.