Russia’s PVC prices to increase in June on demand, pricey imports

Source: ICIS News

2018/05/31

MOSCOW (MRC)--Russian producers of polyvinyl chloride (PVC) are to increase prices in June on the back of healthy demand, with consumers having little room to oppose such increases on the back of expensive imports, according to ICIS-MRC Price Report.

Demand for finished products from PVC increased in May, although at the same time many converters raised prices for finished products due to the rises in feedstocks since the beginning of the year.

Demand for PVC is expected to increase further in Russia in June, and, as a result, producers announced their intention to achieve an increase of Russian roubles (Rb) 2,000/tonne ($32/tonne), compared to May.

Supply is sufficient in the market, although demand continues increasing while import quantities are scarce.

Russian consumers virtually do not have a reasonable alternative to purchasing domestic resin on the back of the rouble’s devaluation and high prices in foreign markets, which make any PVC imports economically unprofitable.

The key suppliers of resin in the past years, based in the north of China, reduced their June export prices of acetylene PVC by $10/tonne from May in order to gain market share in Russia.

However, this does not change anything because Chinese product is still pricier than Russian domestically produced PVC.

Most Russian consumers understand they will need to digest PVC price increases for June deliveries.

Some converters are trying to limit the amount of the price increase of polymer to a smaller value than the one announced initially, however.

A short shutdown for maintenance at RusVinyl, Russia’s largest PVC producer, in April did not affect the market balance.

Ahead still there is a long shutdown for a turnaround at SayanskKhimPlast, Russian second largest PVC producer, expected to start in the second half of July.

In general, June deals for resin with K64/67 were negotiated in the range of Rb70,000-72,000/tonne CPT (carriage paid to) Moscow, including VAT.

Deals for PVC with K70 were also discussed from Rb70,000/tonne CPT Moscow, including VAT, and prices of some producers reached Rb73,000/tonne CPT Moscow, including VAT.

($1 = Rb62.16)

MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.