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PVC prices are inflating despite soft demand and overcapacity.(Polyvinyl chloride)

By Gordon Graff

Demand for polyvinyl chloride (PVC) is off sharply this year as the housing and construction industries--the largest buyers for this plastic--have plunged in the U.S.. Meanwhile, a giant new PVC plant is about to open in the U.S., even as North America is awash in PVC capacity. Such conditions would normally be a recipe for falling prices. But this is not a normal year, and, in fact PVC prices are trending upward. The reason: the surge in crude oil has pushed up pricing for ethylene, PVC's main feedstock, and this factor has trumped recessionary economics. But PVC rates can't defy gravity forever, say analysts, who predict some moderation in tags late this ...

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