Karachi June 05 2021: Polyvinyl Chloride (PVC) prices for South East Asia decreased by USD120 per ton to USD1,390 per ton after making an all-time high of USD1,600/ton. The rise in PVC prices was witnessed due to supply constraints along with higher demand as economies was open after COVID-19. The recent decline in PVC prices is triggered by reduced demand.
On the other hand, Ethylene (PVC’s raw material) also declined by USD115 per ton to USD975 per ton. On a net basis the core delta (difference between end price and raw material price) declined by USD185 per ton to USD898 per ton.
The current development is negative for PVC producers, while the core delta is still on higher side.
However, the last ten-year average core delta of PVC remained below USD400/ton that said the current core delta is 2.3 times higher than its ten-year average.
In Pakistan, Engro Polymer and Chemical Limited, the only local producer, has recent increased its production capacity to ~300 thousand tons per year from ~200 thousand per year while the local demand is ~270 thousand tons per year. Higher demand (driving from higher construction activities) and increasing use (other than conventional) will increase the local demand to ~300 thousand tons in a year.
