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In November the Russian LLDPE market may face possible problems

October 29/2010

MOSCOW (MRC) -- In November the Russian converters may face lack of LLDPE, in particular, butane grades, according to MRC Price reports

Butane LLDPE offer in the Russian market is gradually lowering. Some marketers assume that the converters will face lack of supply in the second half of November. The main reason is the absence of the Russian production as well as limited offer from outside suppliers.

The only Russian LLDPE producer Nizhnekamskneftehim finished production early October before maintenance. The next scheduled production is expected only in December. The second largest supplier of butane LLDPE to the Russian market Shurtanskiy Mining & Chemical Combine - has also suspended production for maintenance this month. Renewal of shipment to the Russian market is expected not earlier than late November, marketers suppose.  

In November the Russian LLDPE market may face possible problems

As a temporary alternative it could be possible to use the European LLDPE. But high euro exchange rate against ruble makes its cost considerably high for small Russian producers. Also it should be taken into account that butane LLDPE offer in Europe is not that big. 

During the last two months many Russian companies-importers faced definite problems during LLDPE imports. Quite often during customs clearance 10% tax is retained at almost zero rate, at the same time the importers have to prove that it is LLDPE that is shipped. All these circumstances seriously complicate the procedure of LLDPE supply to the Russian market and also have an impact on its final cost.

All these factors, according to the experts opinion, may result in lack of LLDPE C4 offer in the Russian market by mid-November. PE offer is gradually decreasing, small volumes of Nizhnekamsk and Shurtan products are offered on the average for 57.000 57.500 RUB/t, including VAT, FCA.

For more detailed information, see Price Reports Polyethylene in Russia.

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