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Pipe-grade HDPE shortage reaches its peak in Russia

September 29/2010

MOSCOW (MRC) -- In the second half of September, pipe-grade polyethylene shortage got tighter in the Russian market - according to MRC analysts.

Pipe-grade HDPE shortage reaches its peak in Russia

 

Traditionally, Russian pipe producers become more dependent on the domestic production and availability of free black pipe-grade polyethylene in international markets in summer and autumn. In July, black pipe-grade polyethylene production was under capacity at Stavrolen due to technical issues, which led to first small wave of pipe-grade material shortage in the market.

 

In August, Russian producers expanded black pipe-grade HDPE production to 17,5 kt. Production increase partly stabilized the market situation; however, polyethylene supply was still tight. Only market majors could afford to import the material from Europe and Asia due to serious difference in price with Russian polyethylene.

 

Kazanorgsyntez, the biggest Russian HDPE producer, was shut down for scheduled maintenance in mid-September. The manufacturer produces more than half of total black pipe-grade HDPE volumes in Russia. Russian pipe producers increased raw material purchase in international markets in September; over the 20 days they imported over 6 kt of polyethylene. However, in international markets supply is also tight: export pipe-grade polyethylene quotes of many suppliers, particularly, of producers from Northeastern Asia, are contracted up to November.

 

Prices for small volumes of Russian black pipe-grade HDPE last week were fixed in the range of RUB 60.000 - 65.000/mt, including VAT, FCA. More Russian pipe producers are forced to temporary switch to natural HDPE due to tight black material supply. Natural material is offered at an average of RUB 56.500 - 58.500/mt, including VAT, FCA.

 

Russian polymers market prospects will be discussed at Russian Polymers Summit on October 14, 2010 organized by ICIS and MRC. For more information please refer to http://www.icisconference.com/russianpolymers/  Summit official web page.

 

mrcplast.com

 

More information about polyethylene market in Russia is available in MRC Price reports.

 

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