European PVC Market Faces Stronger Downward Pressure Ahead of July

European PVC prices continued to soften throughout June as weak demand, competitive imports, and growing sales pressure forced suppliers to offer larger discounts. Although producers initially attempted to limit reductions, market conditions gradually pushed prices lower, setting the stage for a potentially steeper correction in July.

Despite recent declines, PVC prices remain significantly above levels seen before the conflict-driven rally earlier this year, suggesting further downside potential if current market fundamentals persist.

June Discounts Increase as Demand Remains Weak

Throughout June, suppliers struggled to maintain pricing amid slow buying activity and comfortable inventories held by converters. Purchases remained largely limited to immediate requirements, while consumption failed to meet expectations despite the traditional peak season for construction-related applications.

As the month progressed, many producers increased discounts to around €50/ton, matching the decline seen in June ethylene settlements. Competitive spot offers also became more common as sellers sought to secure volumes in a challenging market environment.

PVC Market Performance Since the Rally
Northwest Europe (S-PVC K67)

Increase from Pre-War Level to Peak: ▲60-63%
Peak Reached: Mid-May
Correction by Late June: ▼7%
Current Level vs Pre-War: ▲47%

Italy (S-PVC K67)

Increase from Pre-War Level to Peak: ▲55-58%
Peak Reached: Mid-May
Correction by Late June: ▼5%
Current Level vs Pre-War: ▲45%

Supply Remains Comfortable

Although some production disruptions and maintenance activities remained in place, overall PVC availability was considered sufficient due to weak demand and ongoing inventory reductions across the supply chain.

Converters continued to reduce both raw material inventories purchased during the earlier price surge and stocks of finished goods. End-users also remained cautious, often delaying purchases in anticipation of further price decreases.

Competitive Imports Continue to Pressure the Market

Imported PVC continued to gain competitiveness during June, particularly from Asian suppliers. Offers for upcoming arrivals remained below domestic European prices despite elevated freight costs.

Chinese material was reported around €840/ton CIF, while South Korean offers generally ranged between €840-900/ton CIF, depending on destination and volume.

However, buying interest in imported cargoes remained measured. Many converters expressed concerns that the price advantage of imported material could diminish if European PVC prices continue to fall over the coming months. As a result, some buyers preferred to delay purchasing decisions while monitoring market direction.

July Outlook Turns More Bearish

Market expectations for July have become increasingly negative. Participants anticipate a substantial reduction in the next ethylene settlement following sharp declines in energy and feedstock markets.

While producers may attempt to limit the pass-through of lower costs to protect margins, competitive pressures are expected to intensify. Many market players believe larger price reductions could emerge during negotiations, particularly as suppliers compete for volumes ahead of the summer holiday slowdown.

Feedstock Correction Supports Lower PVC Prices

The unwinding of earlier conflict-related premiums has accelerated in recent weeks. European naphtha prices are now only around 10% above pre-war levels, while spot ethylene prices stand roughly 7% above pre-war levels.

As feedstock costs continue to normalize, one of the major pillars supporting elevated PVC prices is gradually weakening, adding further pressure to the market outlook.

Summer Slowdown Expected to Weigh on Demand

Looking ahead, demand is expected to remain subdued as summer holidays reduce industrial activity across Europe. Ongoing destocking efforts and weak consumption in key downstream sectors are also likely to limit buying interest.

With supply expected to remain adequate and imports continuing to compete aggressively, market participants broadly expect the PVC downtrend to continue into July, with the possibility of steeper declines than those seen during June.

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