Material Cost Update (PVC) – October 2017
Almost two months after Hurricane Harvey, its effects on PVC pricing is still radiating through the industry. Though a five-cent increase was expected in October, but only a 2.5-3¢ increase turned out to be realistic thanks to a decline in PVC exports and an ethylene contract settlement of 3-5¢/lb. Sources at Resin Technology, Inc., Fort Worth, Texas, Houston-based PetroChemWire (PCW), and Michael Greenberg of The Plastics Exchange in Chicago seem to agree that though the recovery from the natural disaster has been faster than expected, challenges still exist in terms of production restarts, logistics, tight supplies, and raised resin prices.
Formosa and OxyVinyl both have multiple units still working up to full rates with Formosa’s force majeure on PVC still being in effect. It is estimated that the force majeure will remain through October.