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In Russia PVC-S market in 2011 exceeded 1 mln tons

January 26/2012

MOSCOW (MRC) -- In 2011, the Russian market of suspension PVC (PVC-S) exceeded the psychological point of 1 million tons. However, last year was quite difficult for the market, according to MRC analysts.

In 2011, the Russian market of PVC-S grew by 15% year on year and reached 1.014 million tonnes. This is a psychological threshold and a historical moment for the Russian market. Russias PVC-S market growth exceeded the whole Central Europe index. Such a serious increase in the last year demand was provided by the producers of PVC profiles and soft compounds.

Since 2006, the Russian market of PVC-S had become a pure net importer. From 2002 till 2008 the demand for suspension in the local market grew on average by 31% per year. The growing needs were satisfied by imports of resins from China, the USA and Europe. In 2008, the global financial recession resulted in a serious reduction of construction volumes. As a consequence, the Russian market in the recessional 2009 declined by almost a quarter and made 657 thousand tonnes, while in 2008 this figure was about 859 thousand tonnes.

Deferred demand in 2009 and economic recovery after the recession in 2010 led to a serious increase in demand for PVC in the Russian market. In 2010, the market of suspension grew by 34% and exceeded the level of the recessional 2008 - 879 thousand tonnes. The Russian converters have begun to invest in increasing capacity and build quite optimistic plans for 2011.

Conveters optimistic forecasts, the dependence on external supplies, as well as dynamic growth of PVC quotations in the external markets, particularly in the U.S., made many participants contract foreign resin more than enough at the beginning of the year. From January till June inclusive, the imports of suspension PVC  to the Russian market grew more than twice.

In Russia PVC-S market in 2011 exceeded 1 mln tons

The moderate growth in demand for finished products made of PVC in 2011 vs. 2010  and imports oversupply in August led to a serious surplus in the Russian market. Local producers competing with the imports declined domestic prices considerably. Since September  imports volume began decreasing gradually and in December amounted to little more than 24 thousand tons.

Last year the Russian producers increased their output of PVC-S by 5% to 554 thousand tonnes. The main increase in production was provided by Caustic (Sterlitamak), due to the facilities upgrade in 2009.

In 2012, production is not expected to grow significantly as the Russian capacities are 100% loaded, the growing demand will still be met by imports.

The imports of PVC-S in 2011 grew by 30% and made 460 thousand tonnes. Over last year, the North American producers had become one of the key players in the Russian market. The U.S. export prices to a large extent determine the pricing in the Russian market. In general, last year the supply from the U.S. increased by 63% to 241.8 thousand tonnes. The volume of imports of Chinese acetylene PVC actually stayed at the level of 2010.

In June, a new market player appeared in the Russian market - Karpatneftekhim (Lukoil Group). Over less than seven months, the company delivered about 32 thousand tonnes to Russia. This year Karpatneftekhim can seriously put competitive pressure on the producers from the United States and China.

Author:Anna Larionova
Category:General News
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