Despite logistics disruptions and rising freight rates due to the Red Sea turmoil, PVC markets in Europe remained stable in February, marking the second month of stability. Let’s see the key takeaways from a market analysis by Chemorbis:
1️⃣ Import Concerns: Players are wary of the impact of Red Sea diversions, keeping imports out of the market. Elevated freight rates and disrupted supply chains may further complicate dynamics.
2️⃣ Low Prices Persist: PVC prices hover at a 3-year low due to weak demand, preventing suppliers from seeking increases. Prices stabilized to avoid further margin erosion after a prolonged downtrend.
3️⃣ Supply-Demand Imbalance: Despite efforts to cope with higher energy costs and slightly improved demand, the supply-demand imbalance persists, particularly in construction applications.
4️⃣ Optimism Amid Challenges: Some participants share optimism regarding a potential market change, eyeing the European Central Bank’s rate decision and hoping for easing pressure on interest rates.
5️⃣ Potential Reversal in March: Suppliers may plan PVC price hikes for March if market fundamentals improve. Focus on export markets may increase if prices continue to rise elsewhere.
6️⃣Local Sellers Supported: Lower import availability and supply snarls support local sellers, despite challenges in the import market, particularly from the US and Asian suppliers.
Overall, while challenges persist, cautious optimism remains for potential market shifts in the coming months, contingent upon improvements in demand and supply dynamics. 📊
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Article Source: Chemorbis
