PVC Prices in Russia Set to Rise in June: Report

Suspension polyvinyl chloride (SPVC) producers in Russia began negotiations for June shipments this week, with producers announcing price increases of 2,000-4,000 rubles per ton ($30.59-61.17/ton) for domestic shipments, according to a report by ICIS.

Many consumers do not have an alternative to Russian raw materials due to a number of factors which have been rising, the report says. PVC supply was tight in some segments in May, and producers intend to achieve increases near the top of the range in comparison with the level of May for deficient positions.

Large volumes of exports since the beginning of the year and the insignificant volumes of imports balanced the market in terms of supply and demand. The shutdown of Kaustik Volgograd facilities in mid-May even led to slight undersupply of K70 PVC.

Two producers, Bashkir Soda Company and Sayanskkhimplast, are expected to shut down sites for maintenance in July, amounting to slightly under 600,000 tonnes/year of capacity.

In light of projected PVC availability levels in summer, several companies began to contract raw materials in China and the U.S. in March and April, but the volume of purchases was small relative to high season requirements, according to ICIS.

“Due to the complexity in logistics, the period from the moment of purchase to the moment of delivery takes up to two months. Some Russian producers have built additional stocks of PVC in anticipation of high demand and scheduled maintenances, but it is likely that these stocks will not be enough to stop the market tightening,” the ICIS report says

June deals for K64/67 PVC were negotiated in the range of 79,000-80,000 rubles per ton CPT (carriage paid to) Moscow, including VAT, for lots of less than 500 tons.