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Having fallen in May, PVC prices in Russia begin rising in June

June 04/2020

MOSCOW (MRC) -- Negotiations over June shipments of suspension polyvinyl chloride (SPVC) to the domestic market began in the Russian market in the middle of last week. After a sharp price drop in May, domestic producers announced a price increase in June, according to ICIS-MRC Price report.

Last month, amid a significant fall in PVC prices in foreign markets and a major decrease in demand due to quarantine restrictions in the domestic market, Russian producers were forced to reduce their prices by Rb8,000/tonne or lower. In the second half of May and early June, PVC prices resumed their upward trend in foreign markets, and demand for resin  began to slowly recover from the domestic market. On the back of this, Russian producers raised their prices for June deliveries to the domestic market by Rb1,000-2,000/tonne.

Quarantine restrictions due to the spread of coronavirus negatively affected demand for finished products from PVC in April-the first half of May. As a result, many converters reduced their capacity utilisation, and some of them, including the large ones, were forced to suspend their operations in the first decade of May.

In the second half of May, quarantine restrictions were eased, and many consumers have already predicted a gradual recovery in demand for finished products from PVC in June and intend to increase their capacity utilisation. At the same time, the last year"s figures are unlikely to be reached in the next couple of months.

Demand has been also gradually recovering in the Chinese domestic market, which led to higher PVC prices in the Asian region. Chinese producers also raised their export prices of acetylene PVC. Offer prices for preferential shipments in containers by rail for Russian consumers have reached USD820/tonne DAP Moscow by early June.

Despite weaker demand for finished products, amid low prices in foreign markets, some Russian companies still began to buy resin. Chinese and American producers traditionally accounted for the bulk of PVC purchases, and according to preliminary results, resin imports reached 6,000/tonnes in May.

Kaustik (Volgograd) shut down its production capacities for maintenance in May. The two largest producers - SayanskKhimPlast and RusVinyl - will shut down their production capacities in July, the outages will last for a month and a couple of weeks, respectively.

Most Russian converters announced an increase in PVC purchases in June, which was partially caused by expectations of stronger demand for finished products. Some companies still began to build up additional stocks for July. 

Overall, June deals for Russian resin with K=64/67 were negotiated in the range of Rb72,000-74,500/tonne CPT Moscow, including VAT, up by Rb1,000-2,000/tonne from May, for quantities of up to 500 tonnes.

Last week, some consumers were in no hurry to agree on deals for June deliveries. At that time, SayanskKhimplast had already sold out all of its June quotas by the middle of this week, and the producer announced a price increase of another Rb2,000/tonne for additional quantities.
Author:Margaret Volkova
Tags:PVC, SPVC, Kaustik Volgograd, Rusvinyl, Nizhni Novgorod, Sayanskkhimplast, Rossiya.
Category:General News
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