Latin American PVC demand to track GDP growth

Latin American PVC demand to track GDP growth image

Latin American PVC demand to track GDP growth

04/03/2019 | Author: Ron Coifman

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Demand this year for polyvinyl chloride (PVC) in various Latin American countries will depend on specific political and economic conditions in each country, even as participants also consider resin pricing.

PVC prices, including in Latin America, will continue to be influenced by prices in Asia and in the US. The global PVC industry pays particular attention to Taiwan’s Formosa Plastics Corp. mid-month announcements of benchmark PVC prices in Asia for the following month.

 

While external factors exist, PVC producing countries in Latin America are somewhat shielded from foreign prices due to policies that protect local industries, particularly in Brazil and Argentina. Because of geographical proximity and trade dynamics, Mexico’s PVC market, however, has been historically aligned with US pricing trends. Pricing policies from other regions may also have an impact in Latin America, but probably on a one- to two-month delay.

ClipperData Petrochemicals

Pacific Coast importers of PVC in South America, namely Colombia, Ecuador, Peru and Chile will be focused on offers from the US, the region’s chief PVC supplier. While Colombia and Brazil produce PVC, they are also strong US importers. (See table below regarding US PVC exports to Americas). Smaller PVC consumers in resin producing countries will likely favor domestic resin because of the lower financial cost of purchasing smaller volumes on an as-needed basis.

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As much as prices affect PVC demand, other key factors driving consumption include the economic conditions in resin producing or importing countries.

As the construction industry is likely to reflect GDP growth projections, PVC consumption in Latin America will be strongly aligned with GDP in each country:

realgdp


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