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LDPE prices began to go up in Russia

March 19/2018

MOSCOW (Market Report) -- The period of long price cuts in the Russian low density polyethylene (LDPE) market is over. The price situation has radically changed in the market since mid-March, prices began to rise gradually, according to ICIS-MRC Price report.

LDPE prices went down in the Russian market since last September under the pressure of weak demand and excessive supply of polymer. Prices for some grades had reached their minimum by February and even fell below prices of its export counterpart to be shipped to several markets. The situation has begun to change gradually to the opposite direction in the LDPE market since March, the downward price trend gave way to growth.

The spring increase in LDPE prices is traditional in the Russian market and is caused by seasonally stronger demand and scheduled shutdown for maintenance at Kazanorgsintez, one of the largest producers. This year does not seem to be an exception. The Kazan producer intends to shut down its production capacities for almost a one-month turnaround on 13 April.

Higher delivery costs also might affect LDPE prices for the end user in the near future. The traditional spring restrictions on road freight transportation will come into force for movement on regional roads in some regions from late March. Such restrictions led to a 50% increase in delivery costs in some regions a year earlier.

There was no deficit of LDPE in the market, but market participants said there were temporary restrictions on shipments by some producers. Besides, some companies began to prepare for a "season of high demand". And if demand for LDPE was very weak in the first two weeks of March, then a serious recovery has been registered in the market since the middle of the week.

There was also information in the market about some producers" plans to significantly increase their prices next week. Some market participants do not rule out a price rise of up to Rb5,000/tonne.

LDPE prices reached their bottom in the market in late February, and prices of 108 grade polyethylene (PE) were at Rb75,000/tonne, CPT Moscow, including VAT. Prices of this PE grade went up to Rb77,000/tonne CPT Moscow, including VAT, or higher as of mid-March.
Author:Margaret Volkova
Tags:PE, LDPE, Kazanorgsintez, Russia.
Category:General News
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