MOSCOW (MRC) -- Russian producers were forced to reduce further contract prices of polyvinyl chloride (PVC) for the domestic market from early December. Prices dropped by an average of Rb500-1,000/tonne from November, according to ICIS-MRC Price report.
Negotiations on December contract prices of Russian PVC began last week. Russian producers had to reduce contract prices on the back of seasonal weaker demand and lower export prices in the US for shipments in November-December.
Deals for December shipments of Russian PVC were negotiated in the range Rb44,000-45,500/tonne CPT Moscow, including VAT, for PVC with K=64/67. Some market participants said they managed to achieve prices below Rb44,000/tonne, CPT Moscow, including VAT. Contracts for PVC with K=70 were negotiated in the range Rb45,500-47,000/tonne CPT Moscow, including VAT.
Demand for finished products from PVC dropped шт 2013 by 5-10% year on year. Many converters reported a major drop in sales of finished products in November after a seasonal peak in September-October (peak demand and peak PVC prices in 2013).
Russian PVC converters had divided into two groups by December. The first group includes companies that intend to enter 2014 with minimum stocks of PVC and finished products and, consequently, do not plan major PVC procument.
The second group consists of companies that intend to preserve large PVC purchases, despite weaker demand for finished products, thus achieving a bottom price level. To date, the number of such companies is scarce.
In addition, a number of companies that plan to shut down their production for long maintenance in late December until February has increased significantly this year.
MRC