MOSCOW (MRC)--Russian producers are targeting
significant price increases in September, amid a significant
shortage of material, according to ICIS-MRC price
The Russian market of suspension polyvinyl chloride (SPVC) became deficient in August following several months of surplus, reduction in imports and planned and unplanned shutdowns of some plants.
Since the beginning of the month, the demand for SPVC in the Russian market has been weak, leading producers to ramp up volumes of exports in order to balance the domestic market. Demand for resin improved in summer, but a serious increase in imports from China has kept the excess supply in the market.
The situation in the market has changed dramatically in August due to the shutdown of several productions. PVC supply tightened significantly, while demand was strong. Some producers in the middle of the week began to raise prices for PVC, with increases also expected for September.
Peak volumes of SPVC imports accounted for May amounted to about 11,800 tonnes, after which external supplies began to decline gradually. For the first 20 days of August, resin imports amounted to about 4,600 tonnes.
Key suppliers and producers from China have begun to increase export prices of acetylene PVC since July on the back of the deficit in the domestic market, and Russian companies have begun to refuse to purchase resin in China.
Prices from some producers have risen by mid August to $995/tonne DAP Moscow, for container shipments by rail (the cost with customs clearance for the consumer will be about Rb76,000/tonne).
Bashkir Soda Company shut its PVC capacities for scheduled maintenances from mid-July to the early of August.
However, production of PVC was suspended from 16 August due to the stopping of ethylene supply. The next start of production is scheduled for the end of this week. The plant's annual production capacity is 240,000 tonnes.
SayanskKhimPlast shut its PVC capacities for a month long turnaround on 24 July. The start-up of production is also scheduled by the end of this week. The plant's annual production capacity is 280,000 tonnes.
Kaustik Volgograd had to stop the production of PVC in the end of last week for a couple of days. According to unconfirmed information, in September, RusVinyl also intends to reduce the capacity utilisation for preventive works.
Thus, the shutdown of productions in line with the import reduction led to a serious shortage of PVC supply in the market.
Some producers reported that by the current week they had sold off all their stocks. At the same time, converters had to contract additional volumes by Rb2,000-2,500/tonne more expensive than at the beginning of the month.
Given strong demand and limited supply, Russian producers intend to achieve further price increases in September.
Some producers have begun to discuss prices for K645/67 PVC in the range of Rb69,000-70,000/tonne CPT Moscow, including VAT.
MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.