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Russian producers plan to roll over September PVC prices for October shipments

October 03/2019

MOSCOW (MRC) -- Negotiations over October shipments of suspension polyvinyl chloride (SPVC) began in the Russian market in the late last week. Local producers announced October PVC prices at a rollover from September, according to ICIS-MRC Price Report.

Prices of Russian PVC reached a historic maximum in the summer, but in September the producers significantly reduced prices and PVC in most cases fell by Rb5,000/tonne. Many consumers were determined to further reduce the price of Russian PVC, but producers see no reason to reduce and intend to roll over September prices for October.

The reasons for such a significant decline in domestic PVC prices in September were a significant increase in imports (13,700 tonnes and 10,000 tonnes in July and August, respectively) and an increase in the supply of raw materials from Russian producers directly after scheduled maintenances.

Imports volumes decreased by half in September and in fact, customers received volumes that were contracted in foreign markets in July - August. At the same time, some consumers said that prices in foreign markets remained lower than Russian material and they are ready to consider the possibility of deliveries of PVC this month from external suppliers, including producers from Europe.

The situation with the demand for PVC from Russian consumers in October is mixed. Some buyers planned to decrease purchases this month by 10-20% compared to September, and this is more typical for producers of profiles.

Some consumers intend to keep capacity utilisation at the September level. Nevertheless, despite the decrease in demand from the domestic market and a possible alternative in the form of imports, Russian producers in most cases do not intend to reduce PVC prices in October.

Deals for October delivery of Russian PVC K64/67 were discussed in the range of Rb76,000-78,000/tonne CPT Moscow, including VAT, for lots of less than 500 tonnes. K70 PVC was contracted at the prices, which were by on average of Rb1,000/tonnes higher.

At the same time, some large consumers reported that they still managed to achieve a slight reduction in prices for October deliveries from some producers.
Author:Anna Larionova
Category:General News
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