MOSCOW (MRC) -- According to the preliminary results of 2019, the Russian suspension polyvinyl chloride (SPVC) market showed an increase in demand of slightly less than 3%, whereas consumption dropped by 6% a year earlier. The current year will be also remembered for a record price level, reported MRC analysts.
The Russian SPVC market showed an increase in demand of slightly less than 3% in the first eleven months of 2019. Given the December demand for resin, the results of the whole year will remain at the same level, whereas demand for polyvinyl chloride (PVC) subsided by 6% from the local market a year earlier. Producers of plasticized PVC demonstrated high consumption volumes this year. This year was also characterized for market participants by a record price level in history.
Despite the high level of capacity utilisation and an increase in the number of shutdowns for maintenance, Russian producers managed to raise their SPVC output in 2019. Thus, overall output of resin reached 866,500 tonnes in the first eleven months of 2019, up by 3% year on year. At the same time, three producers shut down their production capacities for lengthy turnarounds versus two shutdowns in 2018. Thus, the outages took place in May-August or a period of high seasonal demand.
Scheduled shutdowns for maintenance led to record high SPVC prices in the Russian market, prices exceeded Rb80,000/tonne CPT Moscow, including VAT, in July-August. The price roll-back began in September, and prices had reached Rb73,000/tonne CPT Moscow, including VAT, by December 2019, which virtually corresponds to the last year's level.
The record high SPVC prices led to a noticeable increase in imports. Expectedly, July-August, when SayanskKhimPlast and Bashkir Soda Company shut their production capacities for turnarounds, accounted for the peak of imports. And according to preliminary results, overall imports of suspension are about 50,000 tonnes in 2019, up by 2.5 times year on year.
Higher imports and weak demand for SPVC from the domestic market in the first half of the year forced domestic producers to increase their exports. Export sales in 2019 grow by 25%.
In general, the year of 2019 was quite good, despite high prices during the year. Positive growth in demand remained in the plasticized PVC and films segment. The rate of decline in demand from the profile and moulding products has slowed significantly.
The positive dynamics of growth in demand for SPVC will remain in 2020, although the increase will be insignificant. A number of shutdowns for maintenance will decrease, and the period of high seasonal demand will not be as scarce as in 2019.
MRC