Shin-Etsu Chemical (4063.T): US PVC price update

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Shin-Etsu Chemical (4063.T): US PVC price update

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09 Jul 2026 22:20:15 ET │ 14 pages

Shin-Etsu Chemical (4063.T)

US PVC price update

CITI'S TAKE

As of early on July 10th (Japan time), June US PVC prices settled at flat MoM.

While the proposed price hike was +$0.04, customer pressure for price cuts

appears to be intensifying. This marks the first flat price after cumulative Buy

increases of $0.13 cents for January- May. Currently there appear to be no Price (09 Jul 26 15:30) ¥7,010.0

price hike proposals for July onwards. US domestic demand remained firm

Target price ¥8,600.0through June, but concern about a slowdown from July has emerged. Export

prices have declined after a sharp rise in March-April. Expected share price return 22.7%

Expected dividend yield 1.9%

Implications — We had anticipated June pricing to be flat in our forecasts for Shin- Expected total return 24.5%

Etsu Chemical, so results through June are as expected. However, in a recent memo

we said we wanted to watch for difficulties in future price hike negotiations and Market Cap ¥12,944,967M

increasing downward pricing pressure as 1) the cumulative $0.13 increase US$80,217M

(equivalent to a c30% price increase) was achieved amidst slow demand recovery, 2)

the US domestic-export price differential returned to normal following a peak in

export prices and domestic price hikes, and 3) we are gradually entering a seasonally

slow season in the second half of the year. Indeed, downward pressure on prices Price Performance

from customers appears to be intensifying of late. However, we sense there is already

(RIC: 4063.T, BB: 4063 JP)widespread awareness among investors that the second half will be challenging for

PVC. At current share price levels (which already factor in a challenging US PVC