Chemical Economics Handbook® (CEH)

Maritime & Shipping, Chemicals, Polymers May 14, 2025 China-US deal fuels forecasts of higher PVC prices in June By Karina Trevizan Getting your Trinity Audio player ready... HIGHLIGHTS US producers halt offers to South America in anticipation of higher prices Market sees uncertainty in freight, increased production The agreement between China and the US that postponed the application of import tariffs between the countries fueled expectations of higher prices for polyvinyl chloride from June among market participants in the Americas. However, Asian sources report plans to increase production to ship as much material as possible to the US before the tariffs return. With demand steadily low globally and abundant supply from major producers, PVC prices have been hitting lows in recent months. After the agreement, however, markets have remained stable in the Americas. The latest Platts, part of S&P Global Commodity Insights, weekly assessment for Weast Cost South America spot import PVC prices was at $695/mt May 14, flat week over week. In Brazil, prices were assessed at $805/mt CFR Brazil, also stable. On the US export market, spot PVC prices remained unchanged at $640/mt. According to market sources, the agreement is expected to reduce the excess material as viable buying markets are restored, reducing market imbalance and supporting higher prices. "It's not only in Latin America, it's global," a Brazil-based trader said. "This global drop in PVC prices was caused by the influx of Chinese product into the market." In turn, a US-based trader said that "producers and traders are pulling back their May offers as many are expecting a possible price increase," although he added that "importers haven't yet noticed that positivity in the market." Amid very low margins, several market participants reported the lack of US offers to Latin America, in a movement that gained strength after the agreement. "We stopped [selling to Latin America] like everybody else," a third trader said. In this scenario, sellers are prioritizing other regions. "We are selling to the African market with a small margin. I don't see any room for the Latin American market today," a fifth trader said. Meanwhile, Asian prices remain indicated as competitive in the region. A Peru-based trader said that, amid stable demand and lower US supply, inventories are being replenished with Chinese material. Increased production, logistical problems The forecasts of price increases encounter an obstacle in the production increase. In Asia, sources said that producers are trying to produce as much as possible and ship it as soon as possible to the US within the 90-day deadline. As a result, logistical issues are expected. Sources said that the container freight rates from China to the US have little space. Offers were reported as interrupted, with space being allocated to the highest bidder. The same Brazil-based trader said that higher prices are already being heard for Asian resins due to more expensive freight costs. Similarly, the Peru-based trader corroborated that "the logistical situation is quite complicated," adding that "with this delay in tariffs, many companies are taking advantage of this opportunity to place orders in advance before they return." Editor: Ignacio Hernandez Recommended