Russia pipe HDPE supply tight on shutdowns, prices expected to rise

05 July 2017 10:34 Source:ICIS News

MOSCOW (MRC)--A shortage of natural pipe high density polyethylene (HDPE) has apparent since the end of June in Russia due to shutdowns with prices expected to rise, according to the ICIS-MRC Price Report.

Many market participants reported a shortage of supply of natural pipe HDPE grade PE100 in the last week of June.

The main reason was the shutdown of the key Russian producers of this polyethylene - Gazprom neftekhim Salavat and Nizhnekamskneftekhim.

The lack of this material in the market will continue in July, and at the same time, the prices are expected to rise.

The supply of natural PE100 was sufficient in the first half of June with deals done in the range of roubles (Rb) 84,000-87,000/tonne ($1,246-1,291/tonne), including VAT and delivery to the central part of Russia.

Gazprom neftekhim Salavat shifted to the production of injection moulding HDPE and shut its capacities for a month long turnaround.

The second largest producer of natural PE100, Nizhnekamskneftekhim, has since the end of June shifted to the production of linear polyethylene, which is likely to last until August.

Some trading companies temporarily suspended their sales in connection with the temporary shortage of natural PE100, although they have small inventories, and some are considering the possibility of increasing prices.

At the same time, there is a sufficient supply of black PE100 in the market although it is much more expensive than natural HDPE. Price offers for black PE 100 were heard at Rb93,000/tonne FCA (free carrier), including VAT.

($1 = Rb67.41)

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

By Sergey Karaichentsev