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MOSCOW (MRC) -- MRC news digest over
the past week.
1. EPS prices Ukraine remain steady.
Major
suppliers of expandable polystyrene (EPS) to Ukraine keep their price offers for
May shipments at April's level. Thus, the Ukrainian producer Concern Stirol
(Gorlovka) has kept its quotation at UAH19,300-19,400/tonne, FCA.Russian
producer SIBUR-Khimprom has also retained its previous price offer for May
shipments, which amounted to USD2,000/tonne FCA Perm. In the Ukrainian market,
the price of Perm Alphapor is UAH21,000/tonne with downward and upward
deviations depending on quantities of material and terms of payment. Meantime,
the Polish producer Synthos has set its price offer at EUR1,460/tonne FCA. In
April the value of the Polish polystyrene ranged EUR1,470-1,570/tonne FCA. The
price of material is expected to continue to grow in the coming weeks on the
back of positive expectations regarding demand for EPS in the Asian
region.
2. March imports of PET to Kazakhstan fell by 60%.
In
March 2013 imports of PET to the domestic market of Kazakhstan decreased by 60%
compared with February. In March imports of PET granulate to Kazakhstan totalled
to about 3,400 tonnes, while in February the imports of PET to the region
amounted to more than 5,400 tonnes. Cheaper Chinese PET made the biggest share
in the structure of the imports, with more than 2,400 tonnes. The supplies of
Korean PET made about 1,000 tonnes.According to market players, the reason for
decline in imports was the drop in spot prices in Asia and weaker demand in the
domestic market, resulting in the cuts of the purchases in China and Korea. At
the same time, market players are sure that April imports exceed the March
level.
3. LDPE prices at auction in Belarus remained
steady.
Buying activity in the domestic auction for the sale of low
density polyethylene (LDPE) in Belarus was high, but in fact all the deals were
closed at starting prices. On May 16, there was domestic auction for the supply
of high-density polyethylene (LDPE) in Belarus. Buying activity at the auction
was high enough, the only exception was the LDPE for shrinkable film
production. Though the demand for LDPE is high in the market, its prices
remained almost at the starting level - BRb12.97 - 13.49 m/tonne FCA
Novopolotsk, excluding VAT. The negotiation for export prices are scheduled on
May, 17.
4. April output of HDPE in Russia dropped by 14%.
In
April, Russian producers reduced their production volumes of high-density
polyethylene (HDPE) by 14% from March to 76,000 tonnes. The decline in the
output was caused by the switch of Nizhnekamskneftekhim to the production of
linear low-density polyethylene (LLDPE) in April. In April, all Russian HDPE
producers virtually kept the March level of capacity utilization with the
only exception being Gazprom neftekhim Salavat, which increased its production
by 21%. Over the past four months of the year, the total output of HDPE in
Russia amounted to 341,000 tonnes.
5. Russian exports of HDPE in April
grew by 90%.
Russia's exports of high-density polyethylene (HDPE) in
April increased by 90% and exceeded 25,000 tonnes. Low demand for HDPE in
the domestic market, coupled with a high level of capacity utilization forced
some Russian producers to increase export sales significantly. April
exports of HDPE to Russia (excluding the countries of the Customs Union) rose to
a record high since the crisis in December 2009 (22,430 tonnes) and made 25,400
tonnes, which accounted about one third of all produced Russian HDPE in April.
The leader in export sales of HDPE in April was Stavrolen (Lukoil group). Last
month the company shipped to foreign markets about 14,300 tonnes, which is
almost two and a half times more than in March. Kazanorgsintez in April almost
doubled its March output - 9,300 tonnes. Gazprom neftekhim
Salavat also increased its activity in the foreign markets. Pipe HDPE made
the main volume of April exports - 77%. Film and injection moulding HDPE both
made 10% from total exports. About 97% of April exports of Russian HDPE was
shipped to four countries: China (63%), Ukraine (16%), Germany and Turkey (9%).
In the first four months of this year, Russian producers exported more than
60,000 tonnes of HDPE, from 32,700 tonnes over the same period of time in
2012.
6. North American PVC prices for Russia exceeded
USD1,010/tonne.
North American suppliers of polyvinyl chloride (PVC)
continue to raise prices for the Russian market. In early May, export prices of
North American PVC for the Russian market were in the range of USD950-970/tonne
CFR St Petersburg. But already after the May holidays, suppliers of North
American PVC began to increase prices gradually. As a result, this week price
offers for the resin to be shipped in early June rose to USD1,010-1,040/tonne,
CFR St Petersburg. Such a sharp increase in export PVC prices in the US after a
slump in March-April made many Russian companies temporarily suspend procurement
of the raw material. Excessive import volumes of resin to Russia in March-April
and weak demand for finished products allowed to build sufficient stocks of
material. Some companies have temporarily shifted to purchases of resin in
Europe. In their turn, suppliers of North American PVC expect the rise in export
prices to last, at least, till August.
7. Russian imports of PE in April
dropped by 7%.
Imports of polyethylene (PE) to Russia in April 2013 fell
by 7% to 61,400 tonnes. The decline in imports was seen in the supplies of all
PE grades with the exception of low density polyethylene (LDPE). Low demand for
finished products and large leftovers of feedstock forced many Russian companies
to reduce in April the purchases of polyethylene in foreign markets. In April,
imports of high-density polyethylene (HDPE) to the Russian market on the back of
excess supply from Russian producers and the low demand for finished goods
decreased to 27,000 tonnes.
The largest decrease was seen in the supply of
HDPE for extrusion coating of large steel pipes for the production by blow
moulding. External supplies of linear polyethylene (LLDPE) in April decreased by
8% compared with March and totalled 18,000 tonnes. Reduction in imports resulted
from the low demand for the finished film products and the reopening of LLDPE
production by Nizhnekamskneftekhim. Imports of low-density polyethylene
(LDPE) in April made to 10,900 tonnes with the import from Belarus, which was
close to the March figure - 10,500 tonnes. Imports of copolymers of ethylene and
other compositions of polyethylene in April of this year totalled 5,600 tonnes.
During the first four months of this year, the total volume of imports of
polyethylene to Russia made 236,000 tonnes, up 13% compared with the same period
a year ago. Import volumes of linear polyethylene (up 45%) and other copolymers
of ethylene and PE compositions (up 49%) increased substantially.
8.
Production of rubber and plastic goods in Belarus increased by 11%.
In
January - April of this year, production of rubber and plastic goods in Belarus
increased by 11.4%. The production of plastic windows and window sills showed
the largest increase. Belarusian producers of rubber and plastics have
demonstrated a positive trend in the production of finished products this year.
Over the four months of this year production of all key products increased, the
only exception made the production of plastic doors. According to the National
Statistical Committee of the Republic of Belarus, April production of plastic
windows and window sills increased to 38,500 square meters, up 16% from April
2012. Production of pipes, hoses and fittings made from polymers in the
Republic of Belarus last month totalled 1,340 tonnes.
9. Russian
production of finished products made of polymers goes down.
After
February surge Russia's production of finished products made of polymers has
been going down since March. April production of polymer products grew only by
2%. In February 2013 the production of finished products made of polymers in
Russia grew by 15%. In March, many Russian companies on the back of the weak
demand in the domestic market reduced the production of finished
products. April production of key goods made of polymers (pipes and films)
fell to the lowest level, which reflects the current state of the Russian
economy. According to the Federal State Statistics Service, the total production
of pipes, hoses and fittings made of polymers in Russia in April totalled 48,100
tonnes, which is 2% more than in March.
10. Ufaorgsintez resumed PP
production after maintenance works.
Ufaorgsintez (part of "Bashneft"),
Russia's largest petrochemical company, resumed polypropylene (PP) production
after a weekly shutdown for maintenance. On Sunday, 12 May, the company stopped
its PP production for a scheduled turnaround. Initially the maintenance works
were to last for two weeks, but company's employees managed to complete them
within a week's time. PP production was resumed on Monday, 20 May.
11.
Russian DOP rose by Rb80,500/tonne in the spot market.
By late May, a
price rise of feedstocks and limited supply had led to a major increase in the
price of dioctyl phthalate plasticizer (DOP) in the Russian market - by as much
as Rb80,500/tonne. Some market participants do not rule out further price
increases. In late April, Gazprom neftekhim Salavat shut its DOP plasticizer
production for a turnaround. In May, the price of one of the feedstocks for DOP
production - 2-ethylhexanol - increased by Rb7,000/tonne from April. All these
factors have resulted in a serious increase in the price of DOP plasticizer in
the Russian market. By late May, spot prices for Russian DOP plasticizer had
reached Rb79,000-80,500/tonne, including VAT and delivery. The limited supply of
Russian plasticizer made some companies actively buy imported material. Deals
for June shipments of Korean DOP were concluded in the range of
Rb81,000-82,000/tonne, including VAT and delivery.
12. Increase in
excise duty on beer will result in fall of PET processing volumes in
Ukraine.
A three-fold increase in the excise duty on beer will hit the
largest consumption market of PET granulate and adveserly affect the production
of PET preforms in the country. As reported previously, Ukraine's Ministry of
Income proposes to increase the rates of the excise duty on beer almost
three-fold - from UAH0.87/liter to UAH2.43/liter. This innovation is provided
for by the draft law "On Amendments to the Tax Code and other legislative acts."
According to MRC analytics, more than 50% of beer produced in Ukraine are poured
in PET bottles. As per Russia's experience, a rapid increase in excise duties on
beer will reduce the consumption of the product and market stagnation. The other
day, Carlsberg Ukraine's CEO Pyotr Chernyshev also said in his interview to
Interfax that in the case of increase in the excise duty on beer in Ukraine,
Carlsberg do not rule out the possibility of closing one of the plants in
Ukraine. |
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