MOSCOW (MRC) - The most of Russian producers have kept a record high level of prices for polyvinyl chloride (PVC) with a few exceptions in October. High global prices and volatile imports remain the main reasons for the high prices, according to the ICIS-MRC Price Report.
Tight supply, which have remained for more than a year on the Russian PVC market, which systematically led to an increase in prices. Despite the seasonal factor, the situation remains unchanged in October.
Strong demand, although slightly below September level, and insignificant volumes of imports in line with high prices in foreign markets help Russian producers to keep record high levels of prices in the domestic market. This month, producers actually rolled over September prices with a few exceptions.
August PVC imports increased and exceeded 14,000 tonnes, which is a record figure since 2016, and domestic producers also worked steadily. Nevertheless, there was no surplus of PVC on the market in the last month, but at the same time some Russian producers were shipping their delivery arrears under contracts of previous periods.
The imports decrease significantly in September, as the Chinese suppliers limited international railway transportation due to the outbreak of COVID-19 in the north of the country. But at the same time, prices began to grow actively in Turkey and Asia, some Russian producers increased export sales of PVC in the fourth quarter.
Kaustik (Volgograd) shut down its PVC production from 20 September, which is the last shutdown for maintenance of Russian producers this year. The plant's annual production capacity is 90,000 tonnes.
Negotiations on the supply of Russian PVC took place quite promptly in the summer months, the deals were agreed in fact in one day. The discussion of deals was delayed for several days for September and October shipment. Converters were reluctant to agree to deals at record prices, but there was essentially no alternative to Russian PVC.
Since the summer, the range of prices for Russian PVC has been quite large, deals for October supplies of PVC with K64/67 were in the range: Rb155,000-201,000/tonne CPT Moscow, including VAT, for volumes less than 500 tonnes,which actually corresponds to the September level. A producer increased prices of PVC with К58/70 in September, whereas another producer, on the contrary, cut prices.