MOSCOW (MRC) -- MRC news digest as of 11.02.13.
1. European makers to keep January PE prices for CIS countries this month.
Reduction of ethylene contract prices in Europe and weak demand from overseas markets made European makers keep prices of polyethylene (PE) for February for CIS countries at the January level, according to ICIS-MRC Price Report. Though the contract price of ethylene for February was settled at the level of January, many European makers aimed to increase the price of PE. However, amid low demand from foreign markets and the strengthening of the euro, some European producers were forced to keep the January price of polyethylene for February for the CIS markets. Negotiations on February prices of European polyethylene have just begun, but some players already reported that they managed to avoid the price increase.
2. Kazanorgsintez raised contract prices of LDPE.
Kazanorgsintez announced an increase in contract prices of low-density polyethylene (LDPE) to be shipped in February for the domestic market. Other Russian producers also announced the need for a price increase of LDPE, according to ICIS-MRC Price report. The prices for the material to be shipped in February grew by Rb300-500/tonne, excluding VAT. Other Russian producers also reported a necessity for the price increase of low-density polyethylene. At the end of last week, Gazprom neftekhim Salavat raised its LDPE price by Rb1,000/tonne, price offers for PE 158 were voiced at the level of Rb 53,500/tonne, FCA Salavat, including VAT. In January, Angarsk polymer plant raised twice the price of polyethylene for the domestic market, citing its limited amounts of material for the domestic market.Ufaorgsintez reported repeatedly the need for a price increase of LDPE for the domestic market.
3. European producers raised polypropylene prices for the CIS markets.
On Monday, negotiations on European polypropylene (PP) prices for the CIS markets began. Some European producers reported the need to increase PP prices by EUR30/tonne, according to ICIS-MRC Price report. The contract price of propylene in Europe for February was agreed by EUR10/tonne higher than the January level. Negotiations on the prices of European polypropylene for February for the CIS markets started earlier this week. Some European producers announced that they raised export prices by EUR30/tonne, converserly, other producers reduces their prices. The January level of export prices of European homopolymer of propylene (PP-homo) for the CIS countries has been agreed in the range of EUR1,210-1,250/tonne, FCA. In February, on the increase of the contract price of propylene, some producers reported the necessity to further raise PP prices.
4. PET prices to grow in February for CIS countries.
In the first week of February, the major suppliers of PET granulate in CIS countries started to raise prices, citing rising cost of feedstock and growing PET prices in the Asian markets, according to a ICIS-MRC Price Report. Despite the fact that this week buying activity in China is weak, the market players are sure that after the Chinese New Year, prices are likely to rise. Many Asian makers aim to raise prices after the holidays on growing PTA quotations. This week price quotations of Chinese PET, with delivery to Central region of Russia, have increased by USD20/tonne and was at USD1,650-1,670/tonne, DAP Moscow, excluding VAT. Mogilevkhimvolokno also increased February export prices for customers in Ukraine and Russia. Price quotations of Belarusian PET for Russian customers grow Rb53,500-54,000/tonne, DAP Moscow, excluding VAT. Given the current rate of EUR / USD = 1.347, the price of Belarusian PET for the Ukrainian customers, with delivery to Ukraine rose to USD1 ,777-1, 783/tonne, DAP Kiev, excluding VAT.
5. European PE prices for the CIS countries remain at the level of January.
In February, European producers kept export polyethylene prices for the CIS countries at the level of January, according to ICIS-MRC Price report. The contract price of ethylene in Europe has remained at the same level for three consecutive months. Despite this, in January, European makers increased export PE prices for the CIS markets by EUR30-50/tonne, citing the lower margin of production. They also intended to raise prices for February, but low demand in the foreign markets did not allow them to implement their plans. In addition, the market situation is aggravated by the strong euro. This week, negotiations on European polyethylene prices for the CIS markets for February went on. Many market participants report that they managed to keep PE prices for February at the level of January. Deals for high-density polyethylene (HDPE) were discussed in the range of EUR1,250-1,330/tonne, FCA. Price offers for low-density polyethylene (LDPE) were negotiated in the range of EUR1,320-1,380/tonne, FCA.
6. In March Russian imports of PVC to reduce significantly - MRC analysts.
In February, Russia's imports of PVC will grow, but in March, it will be cut significantly, because Russian companies reduce the purchases of PVC in the USA and China due to rising prices and disruptions of contractual terms of delivery. Last year, the share of the North American PVC in total imports amounted to about 46%, its share started to increase in recent months most notably due to the stop of Karpatneftehim's production. In January 2013, the share of the North American PVC in total external deliveries increased to 68%. Strong external demand in November and January, 2012, and limited export quotas amid planned turnarounds of plants led to a serious rise in prices. In February the US prices of PVC for the Russian market increased to USD1 ,075-1, 100/tonne, CFR St. Petersburg.
As a result, many Russian companies have completely refused from purchases of North American PVC in February. The volumes of purchases in January were already reduced several times due to limited export quotas. Due to disruptions of contractual terms of delivery (about two weeks), and a serious decline in purchases in January and February, MRC analysts expect in March a serious decline in imports of PVC from the US.
MRC