Russia’s HDPE price stabilise, increase in July

MOSCOW (MRC)–Following consistent falls since the beginning of the year, Russian prices for high density polyethylene (HDPE) stabilised or increased slightly in July, according to an ICIS-MRC Price report.

HDPE oversupply since early 2017 had put downward pressure on prices, with polyethylene (PE) the product most affected by price falls.

The situation stabilised in the HDPE market in July as producer Gazprom neftekhim Salavat announced an schedule shutdown for a turnaround at its facilities.

Another factor propping up HDPE prices was Nizhnekamskneftekhim’s switch to produce linear low density polyethylene (LLDPE).

A third factor was a shortage, and consequence rise in prices, of natural PE 100 in the pipe grade PE market. 

Gazprom neftekhim Salavat, being lately the key supplier of natural pipe grade PE 100, shut down its HDPE production for almost a one-month maintenance on 1 July.

The Salavat plant scheduled the resumption of its production after the turnaround for 5 August. The plant’s annual production capacity is 120,000 tonnes.

Nizhnekamskneftekhim has switched to LLDPE production since late June and intends to produce this PE grade until September, said the plant’s customers.

The Nizhnekamsk plant’s annual production capacity is 210,000 tonnes.

The fact that HDPE was not produced by two manufacturers during July allowed to balance supply and demand in most consumption sectors of the Russian market.

In the pipe grade PE market, on the contrary, there was a shortage of natural PE 100 since the beginning of the month and by the middle of July prices for some grades had grown significantly and reached Russian roubles (Rb) 89,000-92,500/tonne ($1,258-1,308/tonne) FCA (free carrier), including VAT.

At the same time, there was no great surge in demand for black PE 100 during the month.

The shortage of natural PE 100 led to stronger demand for general-purpose 273-83 grade HDPE.

By the end of July, some traders had begun to restrict their sales of this PE grade because of limited stocks and production problems at Kazanorgsintez.

Offer prices for this PE reached Rb87,000/tonne FCA Kazan, including VAT, in the last week of July.

There was also a slight price rise in the film grade HDPE market in the second half of July.

Demand for this material grew significantly in the electronic trades, with some companies considerably increasing their purchases of this HDPE grade in foreign markets because of the upcoming shutdowns for maintenance at two major producers in September, Stavrolen and Kazanorgsintez.  

Prices were steady in the injection moulding HDPE market in July, as sufficient stocks of injection moulding PE allowed to meet all market needs even in the absence of production of this material by local producers.

HDPE prices are most likely to go up further in the Russian market in August due to the upcoming outages at the two key producers.

Stavrolen intends to shut down its HDPE production for a long maintenance with the modernization of some facilities on 1 September, with the outage expected to last about two months. The plant’s annual production capacity is 300,000 tonnes.

Kazanorgsintez, Russia’s largest HDPE producer, traditionally shuts down its production for a several-week turnaround in the second half of September. Its plant’s annual production capacity is 540,000 tonnes.

($1 = Rb70.73)

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