For the Quarter Ending September 2023

North America:

During the quarter ending in September 2023, the EDC market in North America experienced a notable price decline, attributed to weakened international demand and an oversupply of stock. The initial half of the quarter witnessed a steady decrease in offers, driven by subdued overseas buying interest and subdued local market activity. Plant shutdowns in downstream PVC-producing units during August further intensified the decline in North American EDC prices. The fading PVC industry offtakes in Asian markets were the main contributors to this pessimistic outlook. Industry insiders simultaneously reduced production run rates in response to ample supplies in the US market and buyer reluctance anticipating further price drops. In September 2023, the US EDC market continued to be hindered by lackluster international sales and an oversupply of the product. Traders resorted to selling below producer price levels, compounded by surplus stocks, particularly in the subdued downstream PVC industry. Consequently, a significant decline in overseas offers, coupled with bearish regional demand, drove the substantial EDC price slump in the US market. Additionally, the producer price index, according to FRED data, continued its descent, standing at 319.62 in September 2023.

APAC:

In the quarter ending September 2023, the EDC market in Asia faced a slump driven by reduced regional demand in an oversupplied market. Simultaneously, the downstream PVC sector remained stable amid uncertain consumer confidence. Production rates increased, but a Typhoon disrupted operations, leading to subdued domestic purchasing sentiment for EDC. Despite earlier operational disruptions, EDC prices in China stabilized, accompanied by a surge in PVC demand mid-quarter. Ample stock availability bridged the demand-supply gap, creating a balanced market. China's manufacturing industry saw an increase in the Purchasing Manager Index (PMI) to 49.7% in August, reflecting a more prosperous manufacturing landscape. However, international markets experienced reduced purchasing enthusiasm due to lingering economic uncertainty in September 2023. The holiday season in China in the first week of October 2023 led to pre-purchasing activities and resulted in a marginal change in EDC prices. Furthermore, reduced production run rates prompted the EDC price journey from a subdued market to a revived one, showcasing the industry's resilience.
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Europe:

In the quarter ending September 2023, the European EDC market witnessed relative stability in price dynamics. Following the return of regional participants from summer holidays, cautious pre-purchasing activities occurred among regional buyers, with manufacturers briefly keeping EDC prices at a modest low. August's downstream PVC industry procurement challenges, fueled by high-interest rates, cast a shadow over EDC consumption in the first half of the third quarter. Upstream Ethylene prices inched upward in September 2023, mirroring the surge in crude oil futures, adding cost pressures for EDC producers. Inflation further complicated production concerns, prompted by the ECB's last interest rate hike to counter inflationary pressures. Sellers in September 2023 opted to keep commodity prices on the low to moderate side amidst these challenges. The downstream PVC market saw marginal changes in September prices due to steady downstream demand, consistent international inquiries, and low inventory levels. Economic and geopolitical uncertainties, along with tightening financial conditions, deteriorated demand, with the economic sentiment index witnessing a gradual decline in the Eurozone during the quarter.

Middle East Asia:

In the quarter ending September 2023, EDC prices in the Middle East Asian market experienced a significant drop amidst a moderate increase in downstream demand from the PVC processing segment. The decline was mainly due to low demand in the downstream PVC market and an excess of available supplies in the regional market. An abundance of supplies, especially due to reduced export demand from India and stable domestic downstream sales, kept demand down. The decrease in international orders in the middle of the third quarter of 2023 led to further price reductions, particularly for lower-end products. EDC converters faced lower sales in the end-user PVC industry during this quarter due to oversupply. Additionally, the Consumer Price Index (CPI) in Saudi Arabia increased by 2.0% in August, and the Purchasing Managers Index (PMI) rose, reflecting improved business sentiments in the country, with the latest Saudi data recording a PMI score of 57.2 points.

South America:

The EDC market witnessed a significant price decrease during the third quarter of 2023 due to reduced regional demand and an excess availability of inventory. In the initial half of the quarter, there was a consistent decline in EDC prices, primarily because of subdued foreign buying interest and sluggish local market activity. Plant shutdowns in North American PVC production facilities in August further intensified the drop in EDC export prices. The declining demand for EDC in Asian markets, particularly in the first half of the quarter, prompted industry insiders to lower operational rates in the Latin American region, as buyers hesitated, expecting further price declines. In September 2023, the EDC market continued to face challenges with lackluster international sales and an oversupply of the product. Traders resorted to selling EDC at prices below those set by producers, particularly due to surplus stockpiles in the struggling downstream PVC industry. Consequently, a significant decline in international offers, combined with weak regional demand, played a significant role in the price decrease for EDC in the American market throughout the third quarter of 2023.



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