Russia LDPE prices continue downward trend in August

05 September 2016 10:19 Source:ICIS News

MOSCOW (MRC)--Prices of low density polyethylene (LDPE) fell significantly in the Russian market in August with many grades dipping below roubles (Rb) 100,000/tonne (€1,377/tonne) by the end of the month, according to the ICIS-MRC Price report.

In the summer period LDPE prices in the Russian market traditionally reached record values in previous years due to scheduled outages for maintenance at several production sites.

This year however, the scheduled shutdowns did not lead to shortages and price cuts which began in late May continued.

In July, maintenance works were carried out at two production sites simultaneously: Gazprom neftekhim Salavat and Tomskneftekhim.

Angarsk Polymer Plant also operated with disruptions but this did not lead to a deficit. In fact, on the contrary, excessive supply of LDPE, particularly of 108 grade PE, was felt in the market.

In August, some producers tried to increase LDPE exports to balance the domestic market. However, weak demand and prices in foreign markets did not allow them to achieve this. Oversupply remained and along with it the downward price trend continued.

By late August, prices of 108 grade PE had fallen most significantly. At the same time, the price spread was rather wide in the market.

Deals were done in the range of Rb96,500-102,500/tonne CPT (carriage paid to) Moscow, including VAT. In other regions, offer prices ranged between Rb94,000-101,500/tonne FCA (free carrier), including VAT. Some market players said they do not rule out that the price reduction might stop in September.

Ufaorgsintez plans to halve LDPE production at its first line (108 grade PE) because of the need to repair the equipment. Also, due to technical problems, Kazanorgsintez will reduce capacity utilisation at its third LDPE line (158 grade PE) by three-fold this month.

(€1 = Rb72.61)

MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.

By Sergey Karaichentsev