European PVC Producers Push November Increases Amid Weak Demand and Falling Energy Costs

European PVC producers are seeking another round of price increases in November for the second consecutive month, aiming to rebuild margins affected by earlier rises in feedstock and energy costs. However, comfortable supply and subdued downstream demand continue to limit sellers’ pricing power, while the recent decline in energy prices has strengthened buyers’ resistance to further increases.

Producers Target Increases of €90-150/ton

November price increase requests are generally ranging from €90-150/ton, although some suppliers continue to target gains of up to €250/ton following the €80/ton rise in the November ethylene contract.

A regional supplier was reported to be seeking increases of €90-100/ton, depending on customers’ existing price levels. Another producer initially requested €120-150/ton but showed greater flexibility towards customers who had already accepted higher prices. Most negotiations were still ongoing.

Meanwhile, energy markets have retreated considerably from their recent peaks. Brent January futures were trading around $93/bbl on November 9, compared with levels above $110/bbl early in the previous week. Dutch TTF December gas futures also fell to approximately €83/MWh from above €100/MWh earlier in November.

Despite the decline, PVC producers maintain that their latest targets reflect higher average energy costs recorded in October and the accumulated pressure on margins.

Buyers, on the other hand, are generally looking to restrict increases to €40-50/ton, equivalent to around half of the ethylene contract increase or slightly more. However, market feedback indicates that some settlements could exceed this range and potentially match or even surpass the full €80/ton monomer increase, depending on suppliers’ starting prices and negotiating flexibility.

Comfortable Availability Limits the Impact of Production Disruptions

PVC supply remains sufficient across Europe despite reported production stoppages at Vynova’s Tessenderlo and Mazingarbe facilities. Existing inventories continue to support deliveries, and market participants see little immediate risk of significant supply tightness.

Some participants also expect availability to remain comfortable into 2027, even if trade measures restrict imports, unless demand improves substantially.

The anti-dumping investigation covering PVC imports from China, South Korea, Taiwan and Mexico, together with the registration of these imports since October 27, has made buyers more cautious about overseas purchases. As a result, some are exploring alternative origins, including Brazil, Colombia, Thailand and Qatar.

Certain traders continue to offer South Korean material despite uncertainty surrounding the possibility of retrospective duties. Nevertheless, these sourcing adjustments have not yet translated into a significant increase in demand for European-origin PVC.

Weak Construction Activity Continues to Weigh on Consumption

Recent construction sector indicators offer limited encouragement for a near-term recovery in European PVC demand.

The eurozone construction Purchasing Managers’ Index (PMI) declined to 42.5 in October from 43.4 in September, remaining well below the 50-point threshold that separates expansion from contraction. New orders fell at their fastest pace in six months, while business expectations for the coming year weakened further.

Eurostat also reported that EU building construction output declined by 1% month on month and 4.1% year on year in August, despite an increase in overall construction output.

The difficult market environment is also reflected in feedback from PVC converters, who continue to report weak order books, limited forward visibility and reduced operating rates.

Although one distributor observed slightly better demand compared with October, broader market feedback suggests that a meaningful recovery remains uncertain.

November Settlements Face Resistance Despite Margin Pressure

European PVC producers may secure further increases in November as they attempt to restore margins following higher feedstock and utility expenses. However, the extent of the gains will depend on buyers’ resistance and suppliers’ willingness to negotiate.

Comfortable availability, weak construction-related consumption, cautious year-end purchasing and easing energy prices are likely to prevent many producers from achieving their initial targets in full.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.