The export prices of US ethylene dichloride (EDC), an intermediate to produce polyvinyl chloride (PVC), fell to its record-low this week as the coronavirus pandemic weakened demand, pushing offers to retreat significantly to entice buying interest, market sources told SSESSMENTS.COM.
Export EDC prices stood between $60-$70/ton FOB USG on Tuesday, plunging by $50/ton from the previous week to their lowest level since June 1996. Some market participants confirmed deals were concluded at that level.
Demand for PVC, a construction staple, is related closely to economic activity and growth. As the coronavirus pandemic paralyzes global economic activity and halts construction, demand for products throughout the PVC chain has sharply reduced. Market sources expected that EDC demand would deteriorate through the end of April.
Brazilian petrochemical producer Braskem has been a primary buyer of US EDC after the company closed down its EDC plant in May 2019. Hence it needs to import EDC to maintain downstream PVC production. However, the company said it would revise PVC output rates every week to avoid unnecessary inventories amid the pandemic, which caused an uncertain demand outlook.
