MOSCOW (MRC) -- Negotiations over September shipments of suspension polyvinyl chloride (SPVC) began in the Russian market in the middle of last week. Not all producers announced price cuts, and the reductions were often quite significant, according to ICIS-MRC Price report.
Prices of Russian PVC reached a historic high in the market in July-August due to strong seasonal demand and scheduled shutdowns for maintenance simultaneously at two major production capacities in Sayansk and Sterlitamak. High prices of domestic material led to a multiple increase in imports. And it was precisely large quantities of imports before the end of the high season that became the main reason for price cuts in September prices of Russian PVC. In some cases, price reductions reached Rb4,000/tonnes.
PVC prices in the Russian market have been constantly growing since the beginning of the year, and already in April-May, some buyers began to purchase resin from the US and China on the back of the upward price dynamics of domestic material. Summer strong demand and upcoming shutdowns for turnarounds led to another increase in resin purchasing in foreign markets in June-July.
Two major Russian PVC producers - SayanskKhimPlast and the Bashkir Soda Company, with a total annual capacity of about 600,000 tonnes, shut down their production capacities on 7 July. But higher imports allowed avoiding a shortage of resin in the market during the maintenance period at domestic plants, with the exception of PVC with K=70.
The launch of Russian plants after scheduled turnarounds was quick, and already in August, the market became balanced with a slight surplus due to growth in production volumes and significant imports. Problems with resin with K=70 were resolved (mainly due to imports).
Demand for PVC was strong from the Russian market in August, and good demand is expected in September. But at the same time, some buyers made their purchases as per their monthly needs without building up additional inventories partially because of expectations of a further price cuts in the coming months.
In some cases, September deals for Russian resin with K64/67 were negotiated in the range of Rb76,000-78,000/tonne CPT Moscow, including VAT, for quantities of up to 500 tonnes.
MRC