Price increases expected for Russia domestic PVC in January

MOSCOW (MRC)–Negotiations over January shipments of suspension polyvinyl chloride (SPVC) began in the Russian market early this week, with producers announcing an increase in prices for supplies to the domestic market, according to ICIS-MRC Price Report.

SPVC prices in the Russian market are seen to have reached their minimum in December and are expected to grow next year under the pressure of several factors.

January, like the year before, will be the first month of price increases next year. Russian producers intend to achieve a price increase of Russian roubles (Rb)1,500 – 2,000/tonne ($21.60-28.81/tonne), which is partly due to the increase in the VAT rate.

Demand for PVC from the domestic market remains at a good level as for the current time of the year. Some converters even purchased additional volumes of PVC in December.

Stocks inventories at Russian producers are insignificant due to export. In particular, since October, under the pressure of the seasonal factor, Russian producers began to actively increase export sales in order to balance the domestic market in the face of declining demand.

November export sales of SPVC reached a record level over the past few years and amounted to about a third of the total monthly production volume.

About 30,500 tonnes were shipped to foreign markets in November, excluding deliveries to the countries of the Customs Union, versus 16,700 tonnes in October. Total PVC exports from the country were about 135,5200 tonnes in the first eleven months of this year, up 62% year on year.

There is no import alternative for the Russian consumer even taking into account the January price increase for SPVC.

Key PVC suppliers in past years, including manufacturers from China, significantly reduced export prices in December, in some cases, prices for container shipments of acetylene PVC reached $785/tonne, DAP (delivered at place) Moscow. But even such low export prices of Chinese PVC could not compete with Russian PVC.

Some Russian producers said the growth of the January contract prices of SPVC was a result of the increase in the VAT rate from 2019 by 2%. The current weakening of rouble against the dollar also affected the situation.

Overall, January deals for K64/67 PVC were negotiated in the range of Rb71,500 – 75,000/tonne CPT (carriage paid to) Moscow, including VAT, for lots of less than 500 tonnes. Deals for K70 PVC were discussed on average up by Rb1,500-2,000/tonne.

($1 = Rb69.43)

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