MOSCOW (MRC) -- Negotiations on Russian contract polyvinyl chloride (PVC) prices for May delivery began traditionally in the last week of April. Producers announced intentions to roll over April prices for the delivery next month, as per 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, situation in foreign PVC market have changed by the late April, forcing Russian producers to rollover 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. Some converters said Chinese resin became 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 way. But due to the need to purchase rather large volumes of PVC and the time of delivery (at least three weeks from the moment of deal conclusion to delivery) most converters prefer to buy Russian PVC.
Russian producers of suspension PVC do not worry about increase 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. 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 Rb66,000-68,000/tonne CPT Moscow, including VAT for deals up to 500 tonnes.
A slight tightness of K58/70 PVC supply was felt in the market. There were practically no imports of these PVC grades, while Russian producers have some limitations in the shipments. Deals for May shipments of K58/70 PVC were negotiated in the range of Rb68,500 - 71,000 /tonne, including VAT and delivery.
MRC