Russia LDPE prices continue to rise on plant shutdowns

MOSCOW (MRC)–Limited supply of low density polyethylene (LDPE) in the Russian market continues to put pressure on prices despite low demand, according to the ICIS-MRC Price Report.

This lack of supply, as well as the rise in prices, started in July on the back of scheduled shutdowns: Ufaorgsintez shut for a scheduled turnaround in September; and Kazanorgsintez also reduced production in September-October due to a lack of ethylene.

Demand for LDPE is weak on seasonal factors but the shutdowns of some producers continue to push prices up.

Ufaorgsintez resumed LDPE (108) output on 1 October after 30 days of outage but this factor has not affected the market.

The other part of Ufaorgsintez’s capacity (158th and 153rd) will began operating from 15 October, after almost a month of inactivity. Possibly with the launch of the second train, the market situation will stabilise.

In the meantime, market participants reported Kazanorgsintez has continued significant restrictions on the supply of LDPE to the domestic market, even in the face of a serious decline in exports since September.

According to the company’s customers, Angarsk Polymer Plant will cut capacity utilisation at LDPE production in October.

There has been talk since the end of August on a near full-halt of LDPE production at Gazprom Neftekhim Salavat’s facilities due to economic inefficiency. For the time being the company has confirmed full capacity utilisation in October.

Consumer activity in the market is low in the first days of Octoberm with some converters in no hurry to replenish stocks.

At the same time, LDPE supply is still limited, and prices continue to rise.

Deals for LDPE 108 were concluded in the range of Rb95,000-96,000/tonne ($1,428-1,443/tonne) FCA (free carrier) Ufa, including VAT.

The first deals for the October shipments of the Angarsk LDPE started from the level of Rb90,000/tonne FCA Angarsk , including VAT; some companies reported that they had to do deals at Rb93,000/tonne FCA Angarsk, including VAT.

The similar grade of LDPE, from Kazanorgsintez, has been absent in the market since September.

Price offers for the supply of 158 LDPE started from Rb97,000/tonne FCA, including VAT, and to a greater extent it can be shipped in the next few weeks.

($1 = Rb66.52)