An ongoing vinyl chloride monomer issue at Formosa Plastics' Point Comfort, Texas, plant is impacting downstream polyvinyl chloride production, and limiting availability for August, market sources said Thursday.
Multiple sources -- including some with knowledge of business plans -- said this week Formosa Plastics would not be offering spot export PVC for the upcoming month, adding additional tightness to the export market ahead of potential August price increases. Formosa is expected to have domestic resin in August and meet contractual obligations, sources said.
A source with knowledge of company operations said repairs to the VCM plant were expected to last about two weeks.
Formosa Plastics spokesman Steve Rice declined to comment.
VCM is a key feedstock used in the production of PVC. Formosa has a VCM capacity of 753,000 mt/year at the Point Comfort complex.
US export PVC prices were assessed Wednesday at $830-$840/mt FAS Houston, stable on the week, as the market prepared for potentially higher August offers. One producer -- OxyVinyls --was heard nominating August prices at a $40/mt increase from July levels.
Other August nominations had not been heard by time of publication. A trader source said Thursday that the increase could stick given the absence of a major producer in the market for August. Market participants have previously said prices could move higher in the coming weeks given more limited availability -- due to both production issues and strong domestic demand -- as well as higher pricing out of Asia.
