MOSCOW (MRC) -- The increase of PVC import duty to 15% is a problem for the domestic processing. The duty for finished goods should be equalized with raw material duty to support this business - accroding to MRC analysts.
Of course, Russian PVC production should be saved. But that shouldn't be done at the expence of the converters. If the duty for a compound or profile is 10%, and for raw PVC - 15%, than it is much more profitable to import the finished goods than produce them inside the country. In this case, the duty for finished goods should be equalized, or Chinese companies will enter the Russian market with finished profiles. The similar situation was in 2006 and 2007, when profile imports were close to 200 kt.
PVC-S imports from China amounted to 80 kt in eight months of 2010 (one third of Russian imports), and the suspension market is around 570 kt big. In the long term, return to old duty of 15% will most likeky decrease supply from the spot market players, who are mostly from the USA due to cheaper USD. Russia is a spot market for them today.
Russian PVC market prospects will be discussed at Russian Polymers Summit on October 14, 2010 organized by ICIS and MRC. For more information please refer to http://www.icisconference.com/russianpolymers/ Summit official web page.
More information about the Russian PVC market is available in MRC "PVC in Russia -2010" Annual report.