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Formosa announces domestic PVC price increase: letter

Highlights

Company seeking 5 cents/lb for September on top of previously announced 2 cents/lb increase

Announcement came after

Formosa Plastics USA on Sept. 13 announced a 5 cents/lb price increase for domestic polyvinyl chloride to be effective Sept. 15 or as contract terms permit, according to a customer letter seen by S&P Global Platts.

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The increase was in addition to a 2 cents/lb price increase announced earlier to be effective Sept. 1. If accepted, the latest increase would push prices up by 7 cents/lb for September.

Domestic PVC prices have climbed 45.5 cents/lb ($1,003/mt) since June 2020, when a US housing construction boom emerged, fueled by consumers seeking more space to work from home amid the COVID-19 pandemic.

PVC is a construction staple used to make pipes, window frames, vinyl siding and other products.

Prices were last assessed Sept. 8 at 91.5-93.5 cents/lb ($2,017-$2,061/mt), an all-time high since Platts began assessing the market in 2001.

The announcement came after Hurricane Ida's Aug. 29 landfall in Louisiana prompted five US PVC plants representing 41% of North American PVC capacity to shut down.

Days later, Shintech shut its 1.45 million mt/year PVC plant in Freeport, Texas, on a lack of upstream vinyl chloride monomer feedstock. Olin had shut its 835,000 mt/year VCM plant in Freeport because of an equipment failure, according to sources familiar with both companies' operations.

Shintech's shutdown pushed PVC capacity offline to 59%, though the Louisiana operations have since been working to restart, first bringing upstream units online.

Neither company responded to requests for comment.

Formosa's 513,000 mt/year PVC unit in Baton Rouge, Louisiana, was among PVC plants that shut ahead of Ida's landfall, but was the first to begin restarting, sources familiar with company operations said. The plant resumed normal output over the weekend of Sept. 11.