PVC in Latin America

PVC in Latin America

PVC802 12/02/2003 08:40 Page 2 FOCUS ON Editorial (continued from page 1) introducing RAFT (Reinforce after Forming Technology) to the furniture...

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PVC802

12/02/2003

08:40

Page 2

FOCUS

ON

Editorial (continued from page 1) introducing RAFT (Reinforce after Forming Technology) to the furniture market, but it also sees longer term opportunities in the auto trim sector too. A skin made of PVC or similar material is made in a special tooling system and then reinforced with polyurethane. Claims have been made that RAFT will revolutionize the furniture market by providing good quality products that look and feel right, yet at a cost and at a speed associated in the past only with inferior goods. Given recent improvements in PVC recycling technology, it could contribute something to the vehicle world too. Geoff Pritchard

PRICES AND DEMAND PVC pricing continues to strengthen as demand outpaces supply (continued from page 1) Some of the price rise will be offset by increased feedstock prices. The price of chlorine is expected to rise by $125/tonne to $200-210/tonne in Jul 2002. Ethylene contracts are set to rise by 2 cts/lb to 25.75 cts/lb in Jun 2002. Markets for EDC and VCM are tight. Strong demand for both these products is predicted in 2003 and 2004. The American Plastics Council reports that in Jan-Apr 2002 demand rose by 5%. The decline in vinyl chloride monomer feedstock and polyvinyl chloride unit closures (such as Shintech’s decision to shut down Borden Chemicals and Plastics LP’s unit in Addis, LA) have combined to push prices up. Furthermore there are now only 4 large PVC manufacturers in N America (Shintech, Oxy Vinyls LP, Georgia Gulf Corp and Formosa Plastics Corp USA). There were several outages and planned maintenance programmes early in 2002. The situation should ease toward the end of 2002 with Shintech’s Addis VCM plant back on stream after maintenance. US production of EDC and VCM should fulfil domestic demand, but the amount left for export is expected to decline. European PVC prices have also risen from $525

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/tonne to $705 /tonne, while in Asia prices have increased from $400 /tonne to $680 /tonne. Chemical Market Reporter, 10 Jun 2002 (Website: http://www.chemicalmarketreporter.com) & Plastics News, 3 Jul 2002 (Website: http://www.plasticsnews.com) & Chemical Week, 19 Jun 2002, 164 (25), 65

PVC in Latin America The recovery of the global PVC market from the weakness that it experienced for a major part of 2001 was difficult to predict at the end of the year. Markets in the Latin American region have been significantly affected by events in the USA and Asia, where plant closures, monomer shortages and increasing demand led to tight availability and a number of price hikes. There was a shortage of product for spot offshore transactions between Apr 2002 and May 2002, and a majority of contractual obligations were fulfilled by US and Mexican suppliers in Latin America. US export prices have declined within a range of $480$500/tonne fob US Gulf in Mar 2002. Values have already increased to $630-$650/tonne fob towards the end of Apr 2002. The most significant price hikes and shortages were reported in Central America, Caribbean and Chile, since these regions depend mainly on imports from the USA and Mexico. A line graph shows the prices for general purpose PVC.

COMPANY NEWS Two UK firms in wood substitute race Despite big North American advances in wood-resin hybrid materials as wood substitutes, based on HDPE, PP and PVC, competitors have been slow to enter the European market. Now Environmental Polymer Products (EPI) is to make building profiles using 50:50 wood:HDPE blends based on resin obtained from recycled milk bottles. Meanwhile HW Plastics has agreed a deal with the US door and window frame company, Anderson Corp, gaining exclusive UK rights to make wood-PVC hybrids for building applications under Anderson’s Fibrex name. Manufacturing will be at Macclesfield and product launch is scheduled for late 2002. Plastics & Rubber Weekly 12 Jul 2002, 1

BorsodChem calls for liberalisation of market BorsodChem is calling for liberalisation of the Hungarian ethylene market because of the inflated price it is paying for ethylene feedstocks. BorsodChem is supplied by a single pipeline from Hungary’s only ethylene producer, TVK. BorsodChem uses the ethylene in its PVC plants. European Chemical News, 17 Jun 2002, 76 (2010), 6

Quimica Latinoamericana, Jun 2002, 4 (2), 29

Shin-Etsu shares may be undervalued PVC forges ahead despite low demand Feedstock shortages and production problems forced inventory levels of PVC producers at record low levels in May 2002. Chlorine has been reported to be in short supply during recent months but ethylene prices continue to follow an upward trend. Shutdowns due to maintenance work at a number of VCM facilities, including those of LVM, Solvin and Norsk Hydro, have added to the feedstock problem. Signs of improvement have also been noted in the underlying demand for PVC, though it is still at low levels. Contract prices of PVC have risen by about 70-80/tonne to 740-780/tonne. European Plastics News, Jun 2002, 29 (6), 1

Shin-Etsu Chemical Co is forecasting another record group operating profit in fiscal 2002 of Yen 120 bn, up 5% on 2001. The company has the highest global market share for vinyl chloride and silicon wafer. By early 2003 the firm will increase production capacity for 300mm silicon wafers from 75,000 to 100,000 units/mo. Nikkei Net, 13 Jun 2002 (Website: http://www.nni.nikkei.co.jp/)

European PVC producers slow on e-commerce A survey of 751 suspension and paste PVC polymer customers indicated impatience with speed of implementing e-commerce by European PVC

AUGUST 2002