Russian PVC producers target further price hikes in August

Petrotahlil - Russian polyvinyl chloride (PVC) producers are targeting further price hikes in August because of a weakening rouble and higher prices in Asia and Europe, according to the ICIS-MRC Price report.

Negotiations over August shipments of suspension PVC (SPVC) to the domestic market began on Wednesday, with intentions of raising prices by roubles (Rb) 1,500-2,000/tonne ($21-27/tonne).

In July, Russian producers achieved an increase of Rb6,000/tonne and more due to higher prices in foreign markets and a significant drop in supply from scheduled maintenance outages.

Demand for SPVC in the Russian market began to recover dynamically in June-July after a major decrease in April-May. In July, due to scheduled shutdowns for maintenance at SayanskKhimPlast and RusVinyl, some converters were unable to build up sufficient stocks of polymer.

Turnarounds have been coming to an end with RusVinyl resuming production at the beginning of the week.

SayanskKhimPlast will begin producing PVC in a week, which should increase supply of resin in the market where demand is strong. Increased supply from domestic producers may be easily offset by deferred demand from converters.

Imports have grown in the past few months but remain significantly lower year on year. High prices in foreign markets - particularly China and Europe - the incessant devaluation of the rouble against the dollar and long-term deliveries in certain regions also negatively affected imports.

Converters were in no hurry to agree deals for August shipments of Russian PVC, hoping to minimise price increases.

Consumers understand they will be unable to avoid a rise in August prices but it is becoming increasingly difficult to transfer new prices of material to finished products.

Overall, August deals for Russian resin with K=64/67 were negotiated in the range of Rb80,000-83,500/tonne CPT (carriage paid to) Moscow, including VAT, up by Rb1,000-2,000/tonne from July, for quantities of up to 500 tonnes.

($1 = Rb72.86)

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Source : ICIS

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