North American prices for PVC and PET bottle resin reversed course in August, each dropping an average of 2 cents per pound.
PVC prices had increased by 1 cent in both June and July. The August price drop was tied into lower construction activity in the region. The July increase had been caused in part by weather-related production outages, including a three-day outage at a major PVC resin plant operated by Shintech Inc. in Freeport, Texas.
Market sources said that U.S. and Canadian PVC operating rates declined to just over 82 percent in July. Resin inventory in the region also increased by almost 70 million pounds in July vs. June, increasing days of supply to less than 14 to just over 17. That day-of-supply number is the market's highest since December and is five days higher than the historical average.
U.S. housing starts dropped quite a bit in July. Housing starts for the month came in at an annual rate of a little less than 1.4 million, according to the U.S. Census Bureau. That number was down 4 percent vs. June, and down 7 percent vs. the same month in 2023. The July total also was the lowest so far in 2024. Construction activity accounts for about 60 percent of North American PVC demand.
A planned maintenance turnaround at a major supplier was expected to lower PVC operating rates even more in August, sources said. Regional prices now are up a net of 6 cents so far in 2024.
