US vinyls producer Axiall will implement a 2-cent/lb price increase for all grades of PVC resin effective September 1, according to a letter sent to customers Thursday.
The company cited robust export demand and low system inventories, adding that the company's "own domestic and internal demand is stronger in the month of August than any other month this year."
Additionally, the letter said that "costs related to PVC production, specifically ethylene, have increased dramatically, with a strong likelihood that the situation will persist for the balance of the year."
"The overall supply/demand fundamentals of the PVC industry support improved margins and increased prices as demand continues to improve while rates have likely peaked for the year," it said.
The company is the third major US producer to announce an increase in its September prices -- OxyVinyls was the first producer to announce a September price increase.
Oxy was also the first PVC producer to announce an August increase in late June. Axiall, Shintech and Formosa all closely followed suit, announcing increases of 2 cents/lb, while Westlake announced a 3 cents/lb increase.
On Tuesday, Formosa Plastics said in a letter to customers that it will "delay and restate the [2 cents/lb] price increase for all suspension grades of homopolymer PVC resins and compounds initially intended to be implemented August 1, 2014 to be implemented effective September 1."
Two domestic buyers said that another producer had delayed its August price hike implementation until September, however, company sources with knowledge of pricing could not be reached for comment.
Market feedback has been mixed as the announcements have been somewhat unexpected, as strong domestic sales in late July and early August, combined with high feedstock ethylene costs were heard pushing market participants towards a 1-2 cents/lb settlement increase for August pricing at the beginning of the month.
In spot markets, export PVC prices dropped $30 week on week to be assessed Wednesday at $940-950/mt FAS Houston.
Trading sources said the decline was due to reduced global buying interest and abundant supplies of PVC produced by Asian manufacturers in areas that typically source cargoes from the US. However, producer sources said there was limited supply and production costs were high.
Trading levels were heard in the range of $940-950/mt FAS Houston, with producer offer levels heard at $960-980/mt, while bids were heard at $920/mt FAS-basis.
Domestic PVC was last assessed Wednesday at 62-64 cents/lb delivered via railcar.
