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Asia

Spot supply first started to increase from both carbide- and ethylene-based producers in China in February, amid surplus inventories caused by China’s extended shutdown in the same month due to the rapidly rising rate of coronavirus infections within the country. As the coronavirus started to spread and intensify outside China, many producers in Asia soon saw mounting inventory pressures as a majority of business sectors, including manufacturing, came to a virtual standstill in March.

Initial optimism that China’s PVC demand would improve after the Lunar New Year failed to materialise, as the extension of national holidays by two weeks failed to contain infections within the country. Demand subsequently tumbled in Asia as the rapidly intensifying coronavirus pandemic soon spread globally. Country-wide lockdowns and restricted movement orders in the region, especially in major import markets such as India and Malaysia, caused manufacturing activities in their respective countries to fall sharply.

Europe

PVC availability trends were mixed through the majority of Q1. In January and February, the market was somewhat tighter than in the previous quarter because of strong exports and low US availability. In March, however, the impact of the coronavirus pandemic on global markets began to be felt in terms of reduced demand, with domestic markets also seeing the impact of lockdowns, although this was partially offset by rush orders over supply concerns.

PVC demand was steady through most of Q1, although peak demand season in India together with US production issues meant that export consumption was healthy. In mid-March, the coronavirus pandemic lockdown caused several effects including a spate of rush orders for PVC amid market concerns about supply security and a lower demand outlook for the rest of 2020. The overall impact was mixed with most effects of the lockdown expected to become evident in Q2.

Middle East

Supply of PVC in India was mixed in Q1 2020. Ongoing turnarounds, some of which had begun in Q4 2019, continued to limited supply early in the year, but slowly eased later into the quarter. Supply in the Middle East was slightly limited, amid reduced operating rates at a local plant and lower-than-usual supply from the US.

Demand for PVC in India was higher in early Q1 2020, as processors continued to stock up on the material ahead of the traditional peak season due to begin later in the quarter. However, as the coronavirus pandemic continued to spread, demand started to wane as pipe sales fell. In the Middle East, demand remained stable as the region saw continued activity in the construction sector.

US

Supply of US polyvinyl chloride (PVC) grew during the first quarter as a US producer ramped up capacity expansions. Westlake Chemical launched new production capacity at its Geismar, Louisiana, plant. The additional supply was estimated at about 170,000 tonne/year.

Demand for US PVC was up during the first two months of 2020 as construction activity rose ahead of first quarter 2020. The demand surge leveled off during March as coronavirus-related logistical tie-ups and supply shortages slowed construction. At the end of the quarter, quarantines and other precautions slowed construction projects.