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Russian producers intend to achieve a further rise in PVC prices in March

March 01/2019

MOSCOW (MRC) -- Negotiations over March shipments of suspension polyvinyl chloride (SPVC) began in the Russian market on Tuesday. As reported earlier, producers announced a further price increase for shipments to the domestic market, according to ICIS-MRC Price report.

Prices of Russian polyvinyl chloride (PVC) have already risen twice since the beginning of the year, and March is most likely not to be an exception. Producers" stocks are small, there are no large quantities of import material. And these are the main factors for further price increases. Russian producers announced price increases of Rb1,000-2,000/tonne for March deliveries, depending on the resin.

The current situation is similar to the last year�s trend, when PVC prices rose monthly for Russian consumers until September. And converters were forced to transfer this upward trend to the finished products market.

Russian producers" capacity utilisation at PVC plants is quite high and exceeds 90%, but the excess resin is actively shipped for export. Although it is worth noting that export sales have begun to decline gradually since February. Because of exports, stocks are at a safe level, while some producers manage to contract all their monthly quotas in the first week of trading.

Large quantities of imported material are not available for Russian consumers. Some buyers nevertheless said there is a possibility of small and inexpensive PVC shipments from Europe and China. But they are not able to significantly increase and completely replace Russian resin.

Thus, the key suppliers in the past - producers from the north of China - have been limited in preferential supplies of acetylene PVC to Russia since last year. In fact, only one of the three manufacturers is able to partially offset costs for resin delivery to Russian consumers. And already for March shipments, the entire limit has been used, in fact, in March, we can only talk about April shipments. 

Deliveries of acetylene PVC from China without benefits are unprofitable even taking into account the planned March price increase from Russian producers.

Converters� attitude regarding March purchasing were mixed. Some companies do not intend to increase their purchases in comparison with February, whereas other converters still intend to raise their purchases, despite weak demand for finished products. Thus, converters intend to partially hedge themselves from risks of possible price increases in April.

Overall, March deals for resin with K=64/67 were negotiated in the range of Rb74,000-76,500/tonne CPT Moscow, including VAT, up by Rb1,000-1,500/tonne from February, for quantities of up to 500 tonnes. For special grades, particularly, with K=58/70, some producers intend to achieve a price increase of Rb1,500-2,000/tonne.


mrcplast.ru
Author:Margaret Volkova
Tags:PVC, SPVC, China, Russia.
Category:General News
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