Chemicals | North America Weekly Chains Update

Research evidence excerpt

Chemicals | North America Weekly Chains Update

IdeaMopportunities from the US. Earlier commentary indicated that the market saw a modest

lengthening in the first half of June. Demand was reportedly stable to slightly lower due in

part to buyers working down inventories. Downstream, water treatment and cleaning

reportedly saw improved consumption, while demand from mining was lower. On supply,

sources noted that availability improved in the first half of June due to reduced

maintenance activity and shipments arriving from Asia. Operating rates are expected to be

in the 67-69% range in June (vs. 66%-68% in May) amid ~4% capacity offline (vs. 6.4% in

May).

North America Chlorine market update: Downstream, sources reported weak PVC

demand, including in export markets, driving bearish sentiment for prices. Market

participants indicate that PVC spot prices are likely to continue to decline in July due in

part to high inventories. Earlier chlorine market commentary indicated that demand

increased in the first half of June amid stronger chlorine consumption into water

treatment, MDI, vinyls production and agrochemicals. Sources note that supply increased

relative to May amid an improvement of operating rates to ~85.9% and increased in-

service capacity.

Global Chlorine market update: In Asia, spot chlorine prices were assessed up $5.9/MT

(FOB NE Asia) week-over-week, and downstream, spot PVC prices were assessed flat (CFR

China) week-over-week. PVC demand was reportedly sluggish amid limited market activity

this past week. A producer cited the seasonal downturn behind poor domestic demand

and noted that export demand is volatile. On supply, reports estimated operating rates at

~69.6%. Earlier commentary indicated Chinese chlorine markets saw increased length in