Analysts predict continued PET overcapacity, but growth for PVC

By Frank Esposito
Senior Staff Reporter

Published: December 28, 2012 6:00 am ET

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CHICAGO (Dec. 28, 4:55 p.m. ET) — North American PET resin growth is expected to remain low for the near future, while PVC resin growth in the region is trending upward.

This status has helped PVC exports from North America, which have more than tripled since 2007. And in 2012 a recovering U.S. economy resulted in positive domestic growth for the first time since 2004. “I think North American PVC hit bottom in 2011 and now will see sustained growth domestically,” Brien said. “Exports also should continue to grow.”

Brien added that he expects North American PVC operating rates to improve from just over 85 percent in 2012 to almost 88 percent in 2013. But operating rates among makers of PVC pipe and siding — which have been hammered by the drop in construction — are still around 50-60 percent, he said.

Those low rates could be changing as the U.S. housing market recovers. That’s important for PVC, since construction-related uses account for more than half of domestic sales.

“Global construction spending is up in both North America and the world,” Brien said. “Residential construction is picking up in North America because of low interest rates.”

That trend could lift U.S. housing starts back up to the 1.6 million level by 2017, Brien said — well above their current level of 750,000, but still shy of the 2 million mark they hit before the recession.

“The housing market is slowly beginning to rebound,” Brien said. “There’s a tremendous amount of pent-up demand to replace aging infrastructure such as sewer and water pipe. That bodes well for the [PVC] resin side.”


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Analysts predict continued PET overcapacity, but growth for PVC

By Frank Esposito
Senior Staff Reporter

Published: December 28, 2012 6:00 am ET

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