MOSCOW (MRC) -- Negotiations on Russian contract polyvinyl chloride (PVC) prices for July began last week.
Amid a significant shortage of material Russian producers intend to achieve significant price increase, according to ICIS-MRC Price Report.
Since late last year because of a serious drop in demand and the rouble devaluation PVC imports in Russia have fallen by dozens of times. Domestic demand is mainly satisfied by local producers. However, a number of scheduled maintenance works are approaching, and the producers have said that the current orders for July has significantly exceed their capabilities. Taking this into account suppliers announced price rise of Rb3,500-5,000/tonne for July.
The deals for June suspension PVC (SPVC) have been done mostly in the range of Rb59,000-63,500/tonne CPT Moscow, including VAT. Price offers for July are heard in the range of Rb64,000-67,000/tonnes CPT Moscow, including VAT. Many converters so far declined to accept such a significant price rise, first of all because of the problems with crediting. At the same time, the companies agreed there is no real alternative to Russian resin in the market. The market is already experiencing a shortage with K70 and K67 PVC supply, including because of the temporary restrictions with supply from Russian producers.
The situation with the supply of PVC in the market can only get worse in August - September. SayanskKhimPlast is going to shut its 270,000 tonnes/year PVC capacities for almost a month long turnaround in early August. Bashkir Soda Company plans to shut its 240,000 tonnes/year PVC capacities on two weeks turnaround in the late of August.
RusVinyl will shut its 300,000 tonnes/year PVC capacities for a week long maintenance works in the late September.
Russia's PVC imports increased to about 4,500 tonnes in May.
At the same time, the main increase in imports occurred for the Chinese producers (about 3,300 tonnes), but not all Russian converters can use acetylene resin, in particular, producers of window profiles. PVC imports decreased in June because of the devaluation of the rouble; PVC imports into the country slightly exceeded 1,000 tonnes in the first two week of June.
MRC