Current Balance in Russia, Ukraine & Central Asia Sergey Yaremenko Managing Director, MRC CMT’s 6th Global Chlor-Vinyl Market Istanbul, June 09-10, 2011 MARKET REPORT COMPANY
MRC: Current Balance in Russia, Ukraine & Central Asia, Istanbul, CMT’s 6th Global Chlor-Vinyl Market - 2011
Dec 25, 2014
CMT’s 6th Global Chlor-Vinyl Market presentation by Sergey Yaremenko, MRC Managing Director.
-Future market analytics
-Current data of PVC market
-Impact of Lukoil
-Future market analytics
-Current data of PVC market
-Impact of Lukoil
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Current Balance in Russia, Ukraine & Central Asia
Sergey YaremenkoManaging Director, MRC
CMT’s 6th Global Chlor-Vinyl MarketIstanbul, June 09-10, 2011
MARKETR E P O R T C O M P A N Y
Agenda
Impact of Lukoil
About us
Future market analytics
Current data of PVC market
We make market reports.
We focus on Russia and FSU countries.
We are specialists in PE, PP, PS, PVC and PET markets.
About MRC
Price reports – for pricing data Monthly reports – for balance of supply & demand
ScanPlast – stocks analysis DataScope – prompt Export-Import data
Forecast – price forecasting Annual reports – everything
We produce 1500 reports annually
November, 2006
We provided data to Harriman Chemsult
ICIS-MRC covers data for FSU countries
MARKETR E P O R T C O M P A N Y
ICIS’ content:Asia
Europe
USA
MRC’ content:Russia
Ukraine
Kazakhstan
Uzbekistan
Belarus’
Today we have a joint-venture with ICIS
ICIS-MRC reports today
Converters that used ICIS-MRC reports
consume 60% of PVC in Russia
MARKETR E P O R T C O M P A N Y
… and many others
ICIS-MRC attracts big experts for co-operation
Separately MRC publishes the forecasting reports
All world experts make mistakes asoften as they make forecast.
Anyway we developed Price Forecaststhat include factors affecting prices.
Wheighting these factors at your solediscretion you make your ownforecast.
Agenda
Impact of Lukoil
About us
Future market analytics
Current data of PVC market
when you don’t use any analitycs…
today
… you should go ahead but you don’t see anything
when you don’t use any analitycs…
todaywhen you don’t use any analytics…
today
… you should go ahead but you don’t see anything
when use good analitycs…today
today
… you should go ahead but you have to see to rearview mirror
when use good analitycs…today
today
when you use good analytics…today
… you should go ahead but you have to see to rearview mirror
tomorrowtoday
… you see to rearview mirror
when use good analitycs…you will use a lot of smart navigation tools…tomorrow
…but not pdf reports
Our future analytics
MRC mobile MRC scan MRC news MRC alert MRC strategy MRC help MRC post MRC reports MRC account
LogicallyImmediately
MRC Mobile
Online expert discussion
MRC Alert
Agenda
Impact of Lukoil
About us
Future market analytics
Current data of PVC market
UkraineKazakhstan
Uzbekistan
Belarus’
FSU PVC market
Oil prices return Russian Economy to “New Normal”
New normal is when consumption grows faster than enthusiasm among businessmen.
Consumption of PVC in Russia in 2010 reached historical peak
1 mln. MT-
Russia: unexpected growth
The President of SIBUR: 2010 was a year between crisis and future, in 2010 the growthwas "unexpected even for us".
+34%
+48%
Russia is a big net importer of PVC
Net Import of PVC in 2010 exceeded 500 KT.
Import of PVC for profile extrusion is a key driver of 2010
Investments into PVC processing increased by 4% in 2010 .
Consumption by sectors
New converters’ capacities
TOP-15 investors into PVC processing
New capacities of profile extrusion in 2010 exceed162 КТа.
Main equipment suppliers
For the last two years converters have prefered Turkish extruders from Mikrosan Makina.
Market grew by 29% - 2011 (Jan-Apr)
Import of PVC resin increased by 122%. Share of import is 62% in April, 2011.
Russian production of PVC decreased by 7% in Jan-Apr, 2011.
USA is the biggest current PVC supplier
Russian traders and converters today prefer Oxyvinyls compared to Xinjiang Tianye in 2010.
Production dropped because of ethylene conflict
Salavat ethylene conflict
Structure of polymers consumption in Russia by regions, %
To know about Russia
About half of PVC is consumed in Moscow region.
Sometimes distance between producer and customer exceeds 5’000 km.
Source: MRC
PVC market of Moscow region is
equal to Polish market
4 times bigger then Ukrainian market
6 times bigger then Hungarian market
Source: MRC
Something about Russian converter
П
PETPETPVCPVCPPPPPEPEPSPS
Size of PVC converter is 4 times bigger than PE converter.
If you want to sell even 200 KT of PVC you could have only 30 annual contracts.
Market is ready to use the contract system
Top-5 is 24% of market.
Top-10: 37%.
Top-20: 53%.
Top-40: 65%.
Domestic producers follow the prices of imported PVC
Source: ICIS-MRC
Local price PP-homo, CPT, Moscow, VAT incl, April 2008
0 300 600 900 1200 1500
S. Arabia, Al-Jubail
Poland, Plock
Russia, Nizhnekamsk
Costs Price, FCA, export Duty Logistics to S Pb port Logistics to Moscow VAT
LogisticsShield
Source: MRC
Usually this logistics shield is 50-150 USD/MT. Russian producers want to control high customs duties and high indicative prices.
Sibur’s President D. Konov introduced a new term “logistics shield” (duties and tarrifs should help industry).
Current duty for PVC-S is 10%, but also there are the indicative prices.
.
Again about “Logistic shield”
Energy saving – main driver of PVC market during the next decade
Heat consumption on 1 m2 of living area in Russia is 50% bigger than in the Scandinavian countries.
Russian housing energy consumption is 230 kilowatt-hour per m2 annually, while in EU is 77 kilowatt –hour.
In water consumption - 350 litres per person in Russia against 114 litres per person in Denmark.
Source: MRC
Azerbaijan, KT
0
2
4
6
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Kazahstan, KT
0
1
2
3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Other PVC markets of CIS
Ukraine, KT
0
5
10
15
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Belarus' KT
0
0,1
0,2
0,3
0,4
0,5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Ukrainian market is 3 times bigger than Azeri, Kazakh and Belorussian market together (data of 2008). Unfortunately we don’t have good data about PVC market in Belarus’.
0 1 500 3 000 4 500 6 000
Xinjiang Tianye
Xinjiang Zhongtai
Vladimir Chemical Plant
LG Chem
Sayanskchemplast
Polygran
Kerem Plastik
Caustic, Sterlitamak
Spolana
Ekmen Plastik
Sintas Plastic 2009 2010
Source: MRC
Kazahstan, KT
0
1
2
3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Ukraine, KT
0
8
16
24
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0 8 000 16 000 24 000 32 000 40 000
Formosa
Vinnolit
Anwil
BorsodChem
Oxyvinyls
Spolana
Veka
Ineos ChlorVinyls
Georgia Gulf
Vestolit 2009 2010 2011
UA & KZ markets in 2010
Import of PVC in Jan-Mar, 2011 increased by 42%.
Source: MRC
Ukraine still increases
Before the launch of Kalush Ukraine orients on spot prices
US producers are the current leaders in import of PVC into Ukraine.
Agenda
Impact of Lukoil
About us
Future market analytics
Current data of PVC market
May 27, 2011: new PVC plant in Kalush oficially lounched
+160
Moscow
Budennovsk
Ufa
Salavat
Omsk
Tomsk
Berezniki
KstovoKazan
NizhnekamskDzerzhinsk
Volgograd
Novomoscowsk
Chapaevsk
Sterlitamack
Angarsk
Bratsk
UsoleSayansk
Aliaga
Shurtan
Sumgait
Navoi
Vozlavsk
Kalush
Declared production capacities growth up to 2015:
1015 KTa
+300
+160
+150
+120
+300
PVC, VCM, Ethylene
Necessary investments:
PVC, VCM, caustic, salt
Short chain Caustic/PVC
own ethylene/VCM
Ethylene, PVC, VCM
PVC, VCM, Ethylene
??
Lukoil had better visible reasons to produce PVC
Source: MRC
Product Export before maintenance, MT
VCM 222 958
Propylene 106 992
HDPE 94 963
Benzene 39 895
Ethylene 25 776
Caustic 23 602
Ethylene, KT
208227 234
200
100
200
300
2002 2003 2004 2005
VCM, KT
120173
236195
0
150
300
2002 2003 2004 2005
Caustic, KT
7082
11894
0
75
150
2002 2003 2004 2005
Chlorine, KT
62 73
10491
0
75
150
2002 2003 2004 2005
+180+200
PVC +300 KTa
Kalush will export PVC not VCM
Source: MRC
Model of Russian PVC market, 2009-2010, KT
40
250
102
150
70
88
0
200
400
600
800
45,0 45,5 46,0 46,5 47,0 47,5 48,0 48,5
Price RUB, СРТ, Moscow, VAT incl., Sep. 2010
Average Converter, monthly, MT
Russian PVC market before Lukoil
90% of sales are contracts
70% of sales are contracts
Mainly spot
Only spot
Mainly spot Others
Source: MRC
Russian PVC market with Lukoil
Model of Russian PVC market, 2011-2012, KT, est.
170
0
200
400
600
800
45,0 45,5 46,0 46,5 47,0 47,5 48,0 48,5
Price, RUB, CPT, Moscow, VAT, incl, sep. 2010
Average Converter, monthly, MT
Source: MRC
Two Chinese plants from Xinjiang will have long-term strategic advantage compared to current spot supplies from USA. Because of good logistics and custom clearance in Dostyk.
Some conclusions
Russian PVC market could be equal the German market soon.
The is only one big driver. It’s a window market.
Presidential election in 2012: we expect additional investments into Russian construction.
Shortage of TiO2 is key limitation of the market.
Cable compounds are replaced by PE-X (40 KT).
Lukoil will change the shares of all market players.
Because of low profitability in Kalush, we expect an increase UA custom duty from 0% to 5-6.5%.
Sergey YaremenkoManaging Director
Market Report Company
[email protected]; www.mrcplast.comMoscow +7 495 543 91 94; Kiev +38 044 240 82 35
Many thanks
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