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In Russia PP prices go down

July 28/2011

(MRC) -- A serious decline in overall imports of polypropylene (PP) in Russia in June and July as well as suspension of  Tomskneftechem capacities for scheduled maintenance did not stabilize the prices in the market. Polypropylene prices continue to fall under the pressure of oversupply, according to the ICIS-MRC Price Report.

This year the market of homopolymer propylene turned out to be most vulnerable. In the first half-year, overall imports of PP-homo grew by 47% to around 60 KT, while export shipments of Russian producers reduced by 30%. All these factors led to the gradual accumulation of PP significant stocks at the producers as well as traders.

In June, Russian producers lowered prices in order to reduce PP imports and thereby balance the market. By the end of July, polypropylene imports had fallen significantly (imports from the country-supplier 1 Turkmenistan nearly halted), but the polymer oversupply in the market still remains high.

From July 19, Tomskneftechems capacities (annual production - 130 KTa) stopped for 30-day maintenance. The seasonal factor led to the difficulties in polypropylene supply from Stavrolen (no rolling-stock and limited road transport). In late September, capacities in Budennovsk will be shut down for scheduled maintenance. Also in August, some Russian producers plan to increase export sales of polypropylene.

All of these factors can lead to a serious decrease of PP offer in the Russian market by the end of August. Meanwhile, this surplus continues to downplay prices. By the middle of this week the bid for the Russian raffia had been reduced to RUB 55.000 - 56.500/t, including VAT, FCA.

Tags:PP, propylene, Tomskneftekhim.
Category:General News
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