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Russian PVC price to rise by Rb2,000-4 ,000/tonne in domestic market in June
Negotiations over June shipments of suspension polyvinyl chloride (SPVC) began in the Russian market on 28 May 2019. Local producers announced a price increase of Rb2,000-4,000/tonne for shipments to the domestic market, according to ICIS-MRC Price report.
Expectedly for the majority of market participants, Russian producers intend to achieve an increase in the June contract prices of suspension polyvinyl chloride (SPVC). Many consumers do not have an alternative to Russian raw materials due to a number of factors, and in such conditions customers understand that it will not be possible to avoid further price increases.
PVC supply was tight in some segments in May, and producers intend to achieve a maximum increase in contract prices - Rb4,000/tonnes in comparison with the level of May for deficient positions. The large volumes of Russian PVC exports since the beginning of the year and the insignificant volumes of imports allowed the market to be balanced in terms of supply and demand.
The shutdown of Kaustik Volgograd facilities in the middle of May even led to a slight lack of supply of K70 PVC.
Two producers together will shut down their production capacities for maintenance works in July. Bashkir soda company and Sayanskkhimplast, the total capacity of which is slightly less than 600,000 tonnes per year.
Several companies, understanding the situation with the availability of PVC in the summer months, began to contract raw materials in China and the United States in March - April . But the volume of purchases was small relative to the need for "high season", moreover, due to the complexity in logistics, the period from the moment of purchase to the moment of delivery takes up to two months.
Some Russian producers have built additional stocks of PVC for a period of high demand and scheduled maintenances. But it is likely that these stocks will not be enough to fully meet the possible demand.
June deals for K64/67 PVC were negotiated in the range of Rb79,000-80,000/tonne CPT Moscow, including VAT, for lots of less than 500 tonnes. Some producers increased prices for special brands, in particular, for K70, by Rb4,000/tonne, and the offer price for the June supply to the level of Rb84,000/tonne CPT Moscow, including VAT.