MOSCOW (MRC)--Prices for Russian high density polyethylene (HDPE) pipe increased in June as the market turned from surplus into tightness, a situation which likely to remain during July, according to the ICIS-MRC Price Report.
Demand for HDPE pipe has been seasonally weak, with excessive supply since the beginning of the year.
Demand began to improve in May and local consumers faced serious restrictions in June for supply of HDPE pipe, in particular natural grades.
Tight supply led to a noticeable price increase which will continue in July.
In particular, deals for deliveries of the most common polyethylene (PE) produced by Gazprom neftekhim Salavat in the second half of the month reached Russian rouble (Rb) 100,000/tonne ($1,584/tonne) CPT (carriage paid to) Moscow, including VAT.
The situation is aggravated by the fact that Gazprom neftekhim Salavat shut its capacities in the early July for short-term turnaround.
The first July deliveries from the producer can be expected not earlier than in the second decade of the month.
However, the second producer of HDPE pipe, Stavrolen. does not plan to produce this PE grade next month.
There was no deficit of black PE1100 market in June as supply and demand were balanced.
However, at the same time the only Russian supplier of this polyethylene, Kazanorgsintez, reduced export sales this month.
Negotiations on the July deliveries of black PE100 were started this week, key buyers reported a rise in prices of Rb5,000/tonne in comparison with the level of June.
($1 = Rb63.13)
MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.