Polyvinyl Prices Explained

Polyvinyl prices fluctuate due to rising feedstock costs and subdued demand from the downstream construction industry. The spiking of Brent crude futures and the surging ethylene prices hit production costs. Adding pressure to the market is the abundant export availability in China and its slumping property sector (which used to be the biggest consumer of this commodity).

The limited downstream purchases from India and Southeast Asia also contribute to the southward prices. Moreover, lagged demand and weak exports dominate the European PVC market.

Why are polyvinyl prices fluctuating?

1. Soft Demand

Polyvinyl prices continuously meet pessimistic values as lower demand from polyvinyl chloride (PVC) producers ruled the market due to the diminished PVC downstream industry affected by global construction. Additionally, the anticipated oversupply of the commodity in the 2nd quarter of 2024 will further drive down its prices.

2. Raw Material Costs

The pricing of polyvinyl is heavily influenced by the costs associated with feedstocks and essential raw materials like ethylene, chlorine, and various petrochemicals. As a result, fluctuations in the prices of these materials, resulting from disruptions in the supply chain, shifts in oil prices, or geopolitical events directly affect the production expenses of polyvinyl and its market price.

3. Energy Prices

Variations in energy prices, particularly those of natural gas and oil, directly affect the cost of manufacturing polyvinyl. Also, the escalating geopolitical tension between the Houthi rebels and the West affected the oil supply chain from the Red Sea. Thus, this will determine the availability and value of polyvinyl.

Which variables impact the price of polyvinyl?

• Soft Demand
• Raw Material Costs
• Energy Prices
• Trade Policies and Tariffs
• Global Economic Conditions
• Regulatory Changes

Where does polyvinyl come from?

Polyvinyl or polyvinyl chloride is a synthetic plastic polymer that is derived from vinyl chloride that is produced by the chlorination of ethene, which is obtained from crude oil.

The process of producing polyvinyl involves the polymerization of vinyl chloride monomer, which results in the formation of a white powder called PVC resin. Here’s an overview of how polyvinyl comes from:

1. Vinyl Chloride Monomer (VCM) Production – The main raw material for polyvinyl is vinyl chloride monomer (VCM), which is usually produced using a chemical process known as chlor-alkali electrolysis.  In this process, ethylene and chlorine are combined to form VCM.

2. Chlor-Alkali Electrolysis – Ethylene is commonly derived from petrochemical feedstocks such as natural gas or crude oil and is subjected to a chlorination process to create ethylene dichloride. Subsequently, Ethylene Dichloride is heated to undergo decomposition, resulting in the formation of vinyl chloride monomer and hydrogen chloride.

3. Polymerization to Form Polyvinyl  – The vinyl chloride monomer (VCM) acquired through the chlor-alkali electrolysis process is polymerized to produce polyvinyl chloride.  Within a polymerization reactor, VCM molecules undergo a polymerization process, connecting to create extended chains of polyvinyl molecules.

4. PVC Resin Production – The PVC resin undergoes subsequent processing, which involves both the elimination of impurities and the customization of properties to align with the intended application. Various additives like plasticizers, stabilizers, fillers, and pigments are mixed with the PVC resin to achieve the desired characteristics and properties.

5. Manufacturing PVC Products – The PVC resin is now tailored for specific applications. These include pipes and fittings, vinyl siding, flooring, packaging materials, medical devices, automotive components, and a variety of other uses.

What are the uses of polyvinyl?

Polyvinyl is a synthetic solid polymer and ranks as one of the most extensively utilized plastics by manufacturers worldwide. Additionally, it is a very versatile material that can be produced in flexible (PVC) or rigid (uPVC) format, as colored or translucent transparent glass, depending on the shape and size required.

Furthermore, it is commonly used in construction for pipes, fittings, and gutters due to its durability, low cost, and corrosion resistance. These are some of the uses of polyvinyl:

1. Electrical Cable Insulation – It is used as insulation for electrical cables and wires due to its excellent insulating properties and flame resistance.

2. Window Frames and Siding – Polyvinyl is used for window frames and siding in construction due to its durability, energy efficiency, and resistance to weather and termites.

3. Packaging – It is used for various packaging applications, including blister packaging, shrink film, and food packaging due to its clarity and barrier properties.

4. Automotive Interiors – It is used for various automotive interior components such as seat covers, dashboards, and door panels due to its durability and ease of maintenance.

5. Paints and Coatings – Polyvinyl acetate is used in paints, adhesives, and coatings due to its adhesive properties and ability to form a clear film.

6. Textile Coatings – Polyvinyl is used to coat fabrics to make them waterproof or to provide additional strength and durability.

7. Vinyl Flooring and Wall Coverings – It is widely used in flooring and wall coverings due to its water resistance, easy maintenance, and wide range of designs and colors.

What is the future price of polyvinyl?

Polyvinyl is the world’s third-most widely produced after polyethylene and polypropylene. The medical, automotive, and construction sectors, particularly technological in-roads will play a decisive role in the thriving PVC industry.

On the flip side, the European Union is promoting the use of polyvinyl alcohol (PVA) as it’s an eco-friendly option for packaging due to its biodegradable and non-toxic characteristics. In Germany, an established construction industry will propel the demand for polyvinyl as the company uses it as a cement, caulk, and sealant polymer.

IMARC Group expects the market to reach US$ 56.1 Billion by 2028, exhibiting a growth rate (CAGR) of 4.20% during 2023-2028. Thus, market analysts forecast modest polyvinyl prices ranging from $1,500 – $1,800 per ton.