MOSCOW (MRC)--The period of long price cuts in the Russian low density polyethylene (LDPE) market is ending, with values starting to firm from mid-March, according to the ICIS-MRC Price report.
LDPE prices have fallen in the Russian market since last September under the pressure of weak demand and excessive polymer supply. Prices for some grades had bottomed out by February, and started to rebound in March.
The spring increase in LDPE prices is traditional in the Russian market and is caused by seasonally stronger demand and scheduled shutdowns for maintenance by Kazanorgsintez, one of the largest producers. The Kazan, Russia, producer intends to shut down its production capacities for almost a one-month turnaround on 13 April.
Higher delivery costs may also affect LDPE prices for end users in the near future. The traditional spring restrictions on road freight transportation will come into force for movement on regional roads in some regions from late March. Such restrictions led to a 50% increase in delivery costs in some regions a year earlier.
There was no deficit of LDPE in the market, but market participants said there were temporary restrictions on shipments by some producers. Besides, some companies began to prepare for a "season of strong demand". And if demand for LDPE was very weak in the first two weeks of March, then a serious recovery has been registered in the market since the middle of the week.
There was also information in the market about some producers’ plans to significantly increase their prices next week. Some market participants do not rule out a price rise of up to Rb5,000/tonne ($86.67/tonne).
LDPE prices reached their bottom in the market in late February, and prices of 108 grade polyethylene (PE) were at Rb75,000/tonne, CPT Moscow, including VAT. Prices of this PE grade went up to Rb77,000/tonne CPT Moscow, including VAT, or higher in mid-March.
($1 = Rb57.69)
MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.