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Demand for PVC is strong in USA in December

December 25/2020

MOSCOW (MRC) -- The latest US housing starts data illustrates continued strong demand for polyvinyl chlorie (PVC) in the country, which has bucked the typical seasonal lull seen in colder winter months, reported S&P Global.

November housing starts rose 1.2% to 1.547 million units from October levels, and were 12.8% higher than 1.371 million units in November 2019, according to the data released Dec. 17.

Market sources said a continued push for new dwellings amid the coronavirus pandemic has fueled PVC demand, particularly for single-family housing with separate ventilation systems and more space for consumers working from home.

However, tight supply has supported higher prices. Producers have maintained reduced upstream chlor-alkali rates since April, when rates plunged to 68% from 90% in March amid the height of pandemic-related shutdowns and economic shocks.

Rates had since held in the low to mid-70s percent range until November, when they rose to 80%, according to the latest industry statistics. Rates remained lower year on year, as November 2019 rates were 85%, those statistics showed.

Market sources said high PVC prices may have prompted rates to inch up in November, but rates are not expected to rise significantly given continued weak caustic soda demand.

Chlorine produced in the chlor-alkali process is the first link in the PVC production chain. Caustic soda, a key feedstock for alumina and pulp and paper industries, is a byproduct of chlorine production.

Producers had been reluctant to raise chlor-alkali rates beyond the mid-70s percent range to keep caustic soda inventories in check, but record-high PVC prices may have softened that outlook, sources said.

As MRC informed earlier, as of 8 December, 2020, Westlake Polymers left in force the declared on Aug. 31 force majeure on its North American PVC and upstream vinyl chloride monomer (VCM) plants, after Hurricane Laura adversely impacted its Lake Charles, Louisiana, complex. Westlake's shutdown of its Lake Charles complex idled 38% of its US VCM production, resulting in two VCM plants with a combined capacity of 952,318 mt/year going offline. The complex also has three upstream chlor-alkali plants with a combined capacity of 1.27 million mt/year of chlorine and 1.36 million mt/year of caustic soda - 46% of the company's overall North American chlor-alkali capacity.

According to MRC's ScanPlast report, Russia's overall PVC production reached 891,200 tonnes in the first eleven months of 2020, down by 0.3% year on year. However, two producers managed to increase their PVC output.
Author:Margaret Volkova
Tags:PVC, vinilhlorid, kausticheskaya soda, SPVC, Westlake Chemical, Russia, USA.
Category:General News
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