MOSCOW (MRC) -- Negotiations over prices of European polyvinyl chloride (PVC) for July shipments to the CIS countries started last week. The rise in the cost of ethylene in Europe has been going on for the second month in a row, and, as a result, European producers increased export prices for PVC again , according to the ICIS-MRC Price Report.
The July contract price of ethylene was agreed up by EUR84/tonne from the previous month, which theoretically allows to talk about an increase of EUR42/tonne in net cost of PVC. However, many European producers have increased PVC export prices due to a stronger demand from the domestic and export markets.
A surge of EUR50-65/tonne in export PVC prices for July shipments to the CIS markets has been discussed.
Demand for PVC improved further in July from consumers in the CIS countries compared with June due to the seasonal factor and deferred demand from April - May.
Russian key PVC producers will shut their facilities for turnarounds in July, which affects the balance of local PVC market. A similar situation was in the European market.
Problems at some plants, scheduled shutdowns, and good demand, including from a number of export markets, significantly limited the supply opportunities for a number of European producers. Some producers intend to carry out their shipments to the markets of the CIS countries only in the second half of July.
As a result, PVC export prices rose more significantly than ethylene price increases. Overall, deals for July shipments of suspension polyvinyl chloride (SPVC) to the CIS markets were negotiated in the range of EUR660-720/tonne FCA, whereas last month's deals were done in the range of €595-670/tonne FCA. Some producers announced their prices at EUR730/tonne, FCA, and above, but consumers are not ready to accept such high levels.
MRC