MOSCOW (MRC)--Russia’s high density polyethylene (HDPE) pipe grade continues suffering undersupply, pushing prices up in August, according to ICIS-MRC Price report.
A shortage of HDPE pipe grade in Russia began in June, pushing polyethylene (PE) prices up, although local producers managed to balance the situation in July by increasing their production.
However, in the last month the shortage of HDPE pipe became more acute, leading to an increase of Russian roubles (Rb) 2,000-3,000/tonne ($30-44/tonne) at the beginning of the month.
There was a shortage of both natural HDPE pipe grade and black PE100 in the market.
Many sellers said they had limited sales as some producers will significantly reduce their output in September.
Kazanorgsintez traditionally shuts down its HDPE production capacities for a scheduled turnaround, which lasts for several days, in the second half of September.
The Kazan producer is virtually the main supplier of black PE100 to the domestic market.
Gazprom neftekhim Salavat also intends to significantly cut down its production program for HDPE pipe in September.
Russian consumers virtually have no import alternative as those are significantly more expensive than Russian PE.
The rouble exchange rate’s instability also makes that option a riskier one.
In some cases, prices of natural pipe grade PE reached Rb110,000/tonne CPT (carriage paid to) Moscow, including VAT, this week.
Prices of black PE 100 exceeded Rb116,000/tonne CPT Moscow, including VAT.
($1 = Rb67.66)
MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.