Europe PVC Market Holds Steady as Oversupply Limits September Upside

Europe’s PVC markets remained broadly stable in August after experiencing two consecutive months of price declines. Weak demand and continued oversupply prevented producers from fully passing higher costs through to PVC prices. Although the €42.50/ton increase in the August ethylene contract led producers to initially seek higher prices, most of these attempts lost momentum during negotiations, with the majority of transactions eventually concluded at rollover levels.

August Price Increases Struggle Against Weak Demand

Producers initially entered August seeking increases of around €20/ton to recover part of the margins lost during the previous months. However, limited activity during the summer holiday period and comfortable supply conditions restricted their ability to achieve these targets.

Most August transactions were settled at rollover prices, although small adjustments were seen depending on the previous transaction levels. Slight increases were achieved from particularly low starting prices, while some sellers offered small reductions to buyers who had previously paid higher levels.

Competitive Spot Offers Highlight Excess Supply

Spot market conditions continued to reflect the imbalance between supply and demand. PVC offers in Northwest Europe were reported at €850-950/ton FD, while prices around €950/ton FD were heard in Italy.

However, the availability of lower-priced material did not lead to a meaningful improvement in purchasing activity. Converters remained cautious, concentrating on contractual requirements and limiting additional purchases because of weak downstream demand.

Some producers were also operating with reduced volumes, indicating that competitive spot pricing was driven not only by inventory pressure but also by strong competition among European suppliers.

Europe Remains Behind Firmer Global PVC Markets

Europe’s stable price trend contrasted with stronger conditions in other major PVC markets. In Asia, weekly average K67 prices across China, India and Southeast Asia reached their highest levels since early June, supported mainly by higher production and logistics costs.

A major Taiwanese producer also increased its September offers by $10-30/ton depending on the destination, extending the firmer trend recorded over the previous two months.

In Turkey, PVC producers have also resumed modest attempts to raise September prices, partly supported by firmer Asian benchmarks. Import K67 prices have moved slightly higher, although buyers remain cautious and it is still unclear whether the higher targets can be implemented.

These firmer international markets could offer some support to European PVC prices by making imports less attractive. However, their impact has so far remained limited as competitive domestic spot offers, comfortable regional supply and weak consumption continue to weigh on the European market.

September Outlook Depends Mainly on Demand

Attention is now turning toward September, with expectations for the next ethylene contract becoming less decisive. Current projections point toward a rollover or only a small change rather than a significant increase, reducing the potential for a strong cost-driven increase in PVC prices.

Producers are nevertheless expected to defend their margins after being unable to fully reflect August’s higher ethylene costs in PVC prices. The return of converters after the summer holidays and possible replenishment activity could provide some support to sellers.

However, underlying consumption remains weak and European PVC availability is still comfortable. With limited support expected from ethylene costs, September negotiations are likely to depend mainly on demand and sellers’ need to place volumes.

A broadly stable market therefore remains possible, although firmer PVC prices overseas and any improvement in post-holiday purchasing could help European producers resist renewed downward pressure.

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