Rebound housing construction and low cost of raw materials

Market analyst Mike Smith on March 20-21 ihs world petrochemical conference in Houston in the United States, says the north American PVC development is benefit from low cost raw material supply of natural gas. So, in 2012-2017, the average American PVC demand growth will be slightly less than 5%. During this time Chinese demand growth will remain at 5%, growth in Western Europe is slightly less than 3%, and the growth of the Indian subcontinent nearly 8%.

The increase of the global construction spending would promote the growth and impetus for the global PVC market, the market with 42% of sales from the pipes and fittings, and another 18% from profiles and hoses. As the United States out of the shadow of the 2008-09 recession, the U.S. housing starts are expected to be a strong rebound. Smith said that starts this year is expected to more than 1 million, will reach 1.6 million by 2016.

Export is an important part of PVC market in North America, North America's export balance is expected from 5.5 billion pounds (2.5 million tons) in 2012 to 2017, 7.3 billion pounds (3.31 million tons).

Now in Houston IHS Chemical company's director of chlor-alkali and PVC Smith said: "has become the Middle East in the business of PVC in North America. Export market is still the most important part of its future sales strategies."

North America is second only to global ethylene prices the second lowest in the Middle East region, it also thanks to PVC. Smit said, this is because the cheap electricity is needed to produce chlorine. He added that despite its cost advantage "after the passage of time may be reduced, but PVC profit is expected to remain in the world's highest level of North America.

In this high profit driven, Smith and HIS predicted that North America will add more than 20 pounds (910000 tons) of new PVC production capacity. While this has yet to announce such projects, Smith said, PVC producers in North America are brewing a massive expansion. He said: "a year need/more than 2 billion pounds (910000 tons) of new PVC production capacity to meet demand."

The global PVC starts is expected to be increased from nearly 70% in 2012 to almost 80% in 2017. America's capacity utilization on the PVC will again lead, keep at 90% or higher level.

Smith said: "the United States great. The prospect of PVC will be in for a long time to maintain vitality. This polymer is a advantage."