Petrotahlil - Negotiations over prices of European polyvinyl chloride (PVC) for July shipments to the CIS countries started last week, according to the ICIS-MRC Price Report.
The rise in the cost of ethylene in Europe continued for the second consecutive month and, as a result, European producers increased export prices for PVC again.
The July contract price of ethylene was agreed up by €84/tonne from the previous month, which theoretically allows to talk about an increase of €42/tonne in net cost of PVC. However, many European producers have increased PVC export prices due to a stronger demand from the domestic and export markets.
A surge of €50-65/tonne in export PVC prices for July shipments to the CIS markets has been discussed.
Demand for PVC improved further in July from consumers in the CIS countries compared with June due to the seasonal factor and deferred demand from April - May.
Key Russia PVC producers will shut their facilities for turnarounds in July, which affects the balance of local PVC market, with a similar situation expected in Europe.
Problems at some plants, scheduled shutdowns, and good demand, significantly limited the supply opportunities for a number of European producers. Some producers intend to carry out their shipments to the markets of the CIS countries only in the second half of July.
As a result, PVC export prices rose more significantly than ethylene price increases. Overall, deals for July shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of €660-720/tonne FCA (free carrier), whereas last month's deals were done in the range of €595-670/tonne FCA.
Some producers announced their prices at €730/tonne, FCA, and above, but consumers are not ready to accept such high levels.
Source : ICIS