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MRC news digest as of 22 April, 2013

April 22/2013

MOSCOW (MRC) -- MRC news digest as of 22 April, 2013.

1. Imports of GPPS and HIPS to Russia exceeded 20,000 tonnes.

Russua"s imports of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) in Q1 of 2013 made 20,600 tonnes. March import of GPPS to the Russian market made 5,100 tonnes, up 38% from February 2013. As for the March imports of HIPS, they increased by a quarter, compared to February and amounted to 2,900 tonnes.  
Starting from the beginning of the current year the imports of GPPS  made 12,900 tonnes, up 48% from January-March deliveries in 2012. January-March imports of HIPS amounted to 7,700 tonnes, up 79% from Q1 in 2012. The largest suppliers of GPPS to Russia are Styrolution and Stirol, their shipments of GPPS in Q1 2013 made 7,800 (61%) tonnes and 1,300 (10%), tonnes respectively. The main suppliers of high-impact polystyrene to the Russian market are Polimeri Europa - 2,900 tonnes (38%), Styrolution - 1,600 tonnes (21%) and LG Chem - 1,04 tonnes (13%).

2. Russian production of PVC in Q1 2013 decreased by 1%.

In the first quarter of 2013, total production of polyvinyl chloride (PVC) in Russia made 165,600 tonnes, down 1% compared to the same period in 2012. As for the previous month, Russian producers on the back of low seasonal demand and excess imports in March produced 55,430 tonnes. In February this figure due to the calendar factor was 51,600 tonnes. In March the total production of suspension PVC (SPVC) in Russia amounted to 53,500 tonnes. The largest Russian producer of PVC - SayanskKhimPlast reduced its production in March to 22,600 tonnes (compared to 23,700 tonnes in February). The second largest producer - Kausitk (Sterlitamak), on the contrary, in March increased its PVC output to 19,300 tonnes (compared to 16,00 tonnes in February). Kaustik (Volgograd) in March reduced the capacity utilization rate by 2%, the total output of PVC made about 8,000 tonnes. However, in January - March the total production of PVC by the plant made to 23,300 tonnes, up 5% year on year. Sibur-Neftekhim increased PVC production in March to 3,600 tonnes. At the end of last week, the company completely stopped all its chlorine production. The company has stopped its chlorine production due to the oncoming launch of 330,000 tonne/year production RusVinyl (JV Sibur and Solvin) in the first quarter of 2014. The only producer of emulsion PVC in Russia - Khimprom (Volgograd) in March reduced its capacity utilization by 4%, the production of PVC made about 2,000 tonnes. In the first quarter of this year, production of emulsion PVC made around 5,700 tonnes, which is 3% higher than a year ago. Overall, the first quarter of 2013 total production of polyvinyl chloride in Russia amounted to 165,600 tonnes, down 1% compared to the same period in 2012. The reduction in output to a greater extent resulted from the reduction of SayanskKhimPlast"s capacity utilization. 

3. PVC imports to Ukraine increased by half in the first quarter.

In the first quarter of the year, imports of PVC exceeded 30,000 tonnes, up by half year-on-year. Such a significant increase in imports was due to the outage at Karpatneftekhim (Lukoil group) - the domestic PVC producer. In March, imports of suspension PVC (SPVC) to Ukraine rose to 11,700 tonnes. As expected, last month, American resin accounted for the main increase in PVC imports. In March, supply of North American suspension PVC rose to the level of 7,200 tonnes from 3,800 tonnes in February. In March, a high level of export PVC prices in Europe and large purchases from the USA led to a decrease in shipments of the European polymer. In March, imports of suspension polyvinyl chloride from Europe amounted to 4,600 tonnes from 5,100 tonnes in February. The Ukrainian SPVC maker Karpatneftekhim (Lukoil group) has been idle since September 2012. The outage of the plant was a forced one and due to the adverse economic and business performance of the producer. The Ukrainian government and Lukoil are in the process of signing a memorandum on the creation of favourable conditions for the resumption of production at Karpatneftekhim. Meantime, while the local producer is shut down, imports of PVC will grow.

4. LDPE prices in the Russian market will keep on rising.

Russian producers continue to play bearish in the high-density polyethylene market. This week there were a lot of rumours about a price increase starting from next week by Rb1,500-3,000/tonne. In April, the demand for low-density polyethylene (LDPE) rose after the disastrous January-March. However, LDPE supply in the market is still sufficient. Yet, despite all these factors, some Russian producers are going to raise prices further. The situation becomes even more tense with the upcoming outages for maintenance at LDPE production of major Russian producers. Thus, Kazanorgsyntez will shut its LDPE production for a four-week turnaround from 18 April.  Ufaorgsintez plans to stop its LDPE production in mid-May for a two-week maintenance. Last week the price range for low-density polyethylene was quite wide. Deals for LDPE 158 were concluded in the range of Rb57,000-60,000/tonne, CPT Moscow, including VAT. Deals for LDPE for the production of shrinkable film were made in the range of Rb61,000-63,500/tonne, CPT Moscow, including VAT.  

5. European polyolefins fell in value by EUR20-60/tonne for CIS countries.

By mid-April, many Russian companies had managed to get a reduction in polyolefins prices by EUR20-60/tonne, despite the desire of European producers to limit the decline in April"s export prices to the CIS markets. The April contract price of ethylene and propylene in Europe was agreed by EUR50-60/tonne lower than the March level. However, many European makers were planning to limit the April decline in polyethylene and polypropylene prices by the level of EUR20-30/tonne, explaining it by the fact that in March, they were not able to fully transfer the rising feedstock cost to polymers prices. By mid-April, the European polyethylene prices had dropped by EUR40-60/tonne from March. Deals for high-density polyethylene (HDPE) were concluded in the range of EUR1,170-1,230/tonne, FCA. Polypropylene prices fell on average by EUR20-40/tonne compared to the price level of mid-March. Last week deals for propylene homopolymer (homopolymer PP) were stricken in the range of EUR1,150-1,200/tonne, FCA. Deals for copolymers of propylene  were made in the range of EUR1,220-1,280/tonne, FCA. Some market participants expect a further decline in polyolefins prices in Europe in May, citing an on-going decrease in oil  quotations and the current strengthening of the euro against the dollar.

6. Kazanorgsintez raised LDPE prices.

Kazanorgsintez, one of the major Russian producers of petrochemical products, has announced an increase in contract low-density polyethylene (LDPE) prices. Contract LDPE prices will rise by Rb1,000-1,500/tonne compared to the level of early April and come into effect from 25 April. The rise in LDPE prices is caused by the shutdown of the plant for maintenance (from 18 April for four weeks) and a seasonal increase in demand. 

7. Starting the year Russian PP prices fell by Rb2,000-3,000/tonne.

The excess supply and low seasonal demand for polypropylene (PP) in Russia have resulted in price cuts by Rb2,000-3,000/tonne from the beginning of the year. Previously the price of polypropylene in the spring, on the contrary, grew. Buying activity in PP  market is low. In addition, PP prices were affected by substantial imports (more than 60 mln tonnes in Q1 2013, up 16% from Q1 2012) and the launch of a new 180,000 tonnes/year PP production by Polyom (Titan Group) in February. If in the mid-January the price of PP in the Russian market was at Rb62,000-64,500 /tonne, CPT Moscow, including VAT, for raffia, and Rb63,500-65,500/tonne, CPT Moscow, including VAT, for PP injection -homo, then by the middle of April due to the oversupply and low demand polypropylene prices had dropped to Rb60,000-61,500/tonne, CPT Moscow, including VAT, and Rb61,500-63,000/tonne, CPT Moscow, including VAT,  respectively.
Author:Margaret Volkova
Tags:PVC, PP, PS, PE, EPVC, SPVC, PP-Homo, GPPS, LDPE, HDPE, HIPS, Kaustik Volgograd, Poliom, Omsk, Rusvinyl, Nizhni Novgorod, LG Chem, Polimeri Europa, Kazanorgsyntez, Sterlitamak JSC (KAUSTIK), SayanskKhimPlast, Chemprom, Volgograd.
Category:General News
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