Daily Chemical Reaction
From Lumber to China Spot Trends, Part 2 – A Case for US PVC; US PE Contract Premiums in Question
Key Points:
- We discuss recent US polyvinyl chloride (PVC) market price strength, which is a plus for producer profit support in 3Q20 – in our view, tight natural gas and ethane are more of a late 3Q concern than an export-led PVC price drop.
- We frame the September polyethylene (PE) price hike nominations relative to spot market trends – if current US spot PE prices are considered, the full Sept. PE contract price hike would result in a 10yr. high contract premium.
- Other items worth note today include weakness in US chemical rail traffic WoW, a fire hitting a PE film manufacturing site in TX and US PET demand getting further support from a near-term shortage of aluminum cans.
See PDF below for all charts