Russia LDPE prices resume growth in August after sharp declines

MOSCOW (MRC)–Russian low density polyethylene (LDPE) price growth resumed in August following sharp declines since the second half of April, according to the ICIS-MRC Price Report.

The capacities of Angarsk Polymers Plant and Gazprom neftekhim Salavat were shut for scheduled maintenance works for almost the whole of July.

Nevertheless, the long shutdowns of the two producers did not change the situation in the market.

The turnaround at Gazprom neftekhim Salavat continued in August; Tomskneftekhim shut its capacities for a turnaround in August; Kazanorgsintez and Ufaorgsintez decreased capacity utilisation. Consequently LDPE supply tightened by mid August, leading to the price rise.

Supply of PE was more than sufficient in the market in the early August. At the same time, buying activity has increased significantly.

The prices of 108 PE started from roubles (Rb) 74 000/tonne FCA (free carrier), including VAT, and above; 158 PE was sold for Rb79,000/tonne FCA, including VAT, and more.

By the middle of the month, many traders selling LDPE by Ufaorgsintez production said that they sold all their August PE volumes.

Kazanorgsintez had begun to limit LDPE supply into the domestic market by the mid-August.

Supply of PE from Gazprom neftekhim Salavat was still absent in the market. The company planned to resume production by August 5, but due to problems with ethylene, the launch was delayed until 29 August.

The dynamic decline in prices in the domestic market prompted some Russian producers to increase the export of LDPE in recent months.

July PE exports from Russia exceeded 21,400 tonnes; PE exports over the 20 days of August made about 16,000 tonnes.

At the same time, in the beginning of August, export prices for some LDPE grades equalled domestic prices.

Strong demand and limited supply of LDPE in the market began to put pressure on prices in the Russian market in the second half of August.

In the last week of the month, the supply of polyethylene in the market was insignificant from traders.

Prices reached the level of Rb84,000/tonne FCA, including VAT, for 108 LDPE and Rb86,500/tonne FCA, including VAT, for 158 PE.

The market has waited for the settlement of the September level of contract prices for Russian PE.

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