US PVC export prices were expected to increase in April, driven by strong demand from Asia, as imports from Japan were anticipated to plummet in coming months due to plant outages derived from a massive earthquake.
"Some US producers have decided to postpone one more week the announcement of their April nominations. They are waiting to see what is the impact of Japan's PVC situation on the global markets before making any decision," one trader said.
On March 4 an 8.9-magnitude earthquake hit the northeast coast of Japan. Three PVC plants, with a combined capacity of 818,000 mt/year and representing 41% of Japan's total PVC production, were shut as they were affected by the earthquake.
"We are seeing some pressure in prices around $1,050/mt FAS Houston... many are arguing that Japan situation will contribute to the tightness," another source noted.
Other sources anticipated that April PVC export prices could reach up to $1,150/mt on CFR basis. However, prior to the Japan earthquake, the US PVC market was characterized as tight as some traders and end-users reported problems procuring resin from US manufacturers.
This week traders from Asia and Latin America said that some US producers, such as Westlake, were sold out for the next two months, though confirmation from the company was not immediately available.
Buy interest from Turkey was heard at $1,130-1,140/mt CFR Istanbul, meanwhile bids from Egypt were talked at $1,125-1,160/mt CFR Alexandria. However, no deals were reported done and buy interest from China remained absent, sources said.
"Demand from China would be on the low side as the Chinese government is tightening its credit policy to control inflation rates," one producer said. He also added that due to the supply shortage in the US PVC market, demand from Asia or Europe would not be supplied in the short term.
In Mexico, derived from the supply tightness in the US, Mexichem was announcing a price increase of $75/mt for its April contracts.
Meanwhile a bidder from Chile was heard bidding a 500 mt April cargo in the US but was told the market was oversold.
Other sources said that as seasonal demand from the PVC domestic market was expected to rebound in April, some US manufacturers were cutting export production and posting a 3 cents price increase for April contracts.
