MOSCOW (MRC) -- Russian producers began negotiations over February shipments of Russian PVC at the end of last week. Pressured by a major slump in demand and a noticeable increase in imports in January, Russian producers cut their prices for February deliveries after several months of steadiness, according to ICIS-MRC Price report.
Since November, the availability of PVC in the global markets has been gradually increasing, and along with it, a steady price reduction was registered in a number of regions. But difficulties with logistics for shipments of resin from a number of regions of the world did not allow Russian companies to significantly increase imports. And the lack of stable and sufficient imports allowed Russian producers to maintain PVC prices in the domestic market at a record high level. The situation changed drastically in January, Russian producers cut their prices by Rb2,000-14,000/tonne.
Since November, PVC has been steadily getting cheaper in the Asian region, and local producers' export prices have been also going down. February was no exception, the key producers' prices of resin fell in the region by USD70-100/tonne.
US producers reduced their export prices more dynamically, while export quotas grew in parallel. By late January, prices of North American resin for Russian buyers dropped to USD1,600/tonne CFR St. Petersburg and lower. Even several deals were reported after a rather long pause.
But very weak demand amid unusually high imports in the winter period was the main reason for the price adjustment for the domestic market by Russian producers. Thus, according to preliminary data, almost 13,000 tonnes of PVC were imported to Russia in January, whereas imports exceeded this figure only once last year.
Negotiations over February deliveries of Russian PVC began at the end of last week, but, like a month earlier, many converters were in no hurry to discuss deals. In fact, some converters have been still negotiating this week. But in general, all market participants reported lower prices of Russian PVC for February shipments, with resin with K=70 accounting for the greatest price decrease.
Deals for February shipments of PVC with K64/67 were negotiated in the range of Rb172,000-177,000/tonne CPT Moscow, including VAT, for quantities less than 500 tonnes. Prices of resin with K=70 were discussed at an average of Rb195,000-198,000/tonne CPT Moscow, including VAT.