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Shortage of pipe-grade HDPE pushed up prices

July 27/2009
MOSCOW (MRC) -- There is an acute lack of pipe-grade HDPE in the Russian market. Kazanorgsyntez’s material used to produce gas pipes is not available; PE80 output at Stavrolen is not enough to meet increasing market needs.

Rushing demand for pipe-grade PE resulted in an unprecedented increase in prices – RUB50.000/mt, including VAT, MRC’s analysts report.
Imports of PE80 HDPE used to produce gas pipes in June did not exceed the historical level of 100 mt due to high purchasing prices. Consumption of pipe-grade HDPE was insignificant in the Russian market during Q1; major feedstock volumes were being accumulated in stocks of trading companies and producers. The situation began to change at the end of May, and Russian producers noticed the first signs of PE80 shortage already at the end of June.

Supply of Russian PE80 grade in the domestic market is expectedly to be limited this month.
According to MRC, Kazanorgsyntez will use the planned output for own purposes, whereas production of PE80 used to produce gas pipes in Budennovsk will be limited by a feedstock factor.
Source: MRC

For more details, see Price Report.

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