Russian producers intend to roll over April PVC prices for May delivery

MOSCOW (MRC)–Negotiations on Russian contract polyvinyl chloride (PVC) prices for May delivery began traditionally in the last week of April, with producers announcing intentions to roll over prices for the delivery next month, according to the ICIS-MRC Price Report.

Negotiations on May contract prices of Russian suspension PVC (SPVC) began on Monday, and some converters said they had already managed to agree deals.

Producers have taken a firm attitude concerning PVC prices since the beginning of the year and continuously increased them.

However, the situation in foreign PVC markets has changed by late April, forcing Russian producers to roll over prices.

Since the beginning of the year, the Russian rouble has strengthened against the dollar by more than 6%.

The key PVC importers into Russia,  Chinese producers significantly decreased export prices in April.

These two factors resulted in a notable increase of the purchases of Chinese acetylene resin from Russian companies.

Some companies also are going to buy quite a large volume of PVC in May, with some converters stating that Chinese resin had become really affordable over the last several weeks.

However, even taking into account attractive prices there are some risky factors which reduce purchases.

In particular, the best way to supply in the central part of Russia in containers is by rail. But due to the need to purchase rather large volumes of PVC and the time of delivery (at least three weeks from deal conclusion to delivery) most converters prefer to buy Russian PVC.

Russian producers of suspension PVC do not worry about increases in imports, anticipating seasonally strong demand and future turnarounds of two major producers.

Bashkir Soda Company and SayanskKhimPlast are going to shut their capacities for turnaround in July. The producers intend to build up stock inventories in order to satisfy their customers needs during the season of strong demand for resin.

Supply of K64/67 PVC in the market is more than sufficient. Deals for May delivery are discussed in the range of roubles (Rb) 66,000-68,000/tonne  ($1,060-1,093/tonne) CPT (carriage paid to) Moscow, including VAT for deals up to 500 tonnes.

A slight tightness of K58/70 PVC supply was felt in the market, with practically no imports of these PVC grades, while Russian producers have some limitations in shipments.

Deals for May shipments of K58/70 PVC were negotiated in the range of Rb68,500-71,000/tonne, including VAT and delivery.

($1 = Rb62.24)

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