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Russian producers agreed November pipe HDPE prices at the rollover from October

November 04/2013

MOSCOW (MRC) - Russian producers managed to agree November pipe high density polyethylene (HDPE) prices at the rollover from October, despite weakening demand , according to ICIS-MRC Price Report.

The negotiation for contract Russian pipe HDPE prices for November finished last week.  Despite the efforts of polyethylene (PE) pipes producers, prices of Russian HDPE for November delivery remained at the level of October.

Nizhnekamskneftehim temporarily suspended the production of pipe PE in mid October, having switched to the production of linear polyethylene; Gazprom neftekhim Salavat also switched to the production of injection moulding HDPE. Both plants are expected to resume their pipe HDPE production not earlier than in early December. Kazanorgsintez has had serious debts on October contractual obligations.

However, despite all these factors, the shortage of pipe HDPE is not felt now, and is not likely to be in November because many market participants said number of orders declined back in September, the peak of the season in the pipe market.

Spot deals for black Russian PE 100 in the second half of October were done at Rb69,000-69,500/tonne CPT Moscow, including VAT. Deals for natural PE 100 were struck in the range of  Rb64,500-65,500/tonne CPT Moscow, including VAT.

In general, Russian market of PE pipes goes through quite a challenging times. Since the beginning of the year, many pipe producers have been complaining of a serious fall in demand for finished products from the state - a key consumer, and as a consequence, increased competition in the market.

According to Rosstat, total production of polymer pipes in Russia was 446,200 tonnes in the first nine months of this year, down by 18.5% year on year.

The problem of weak demand was strengthened by the problem of auctions in the procurement of finished pipes.
Prices in the market of PE pipes have been falling at the auctions because of tough competition, while feedstock costs remained at a quite high level.  As a result, some market participants have started to decrease the cost of production of PE pipes, which effected the quality of the products.
Author:Anna Larionova
Tags:PE, HDPE, pipe extrusion, other pipes, Gazprom neftekhim Salavat, Kazanorgsyntez, Nizhnekamskneftekhim, Russia.
Category:General News
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