MOSCOW (MRC) -- Russian market of high density polyethylene (HDPE), as well as low density polyethylene (LDPE) faced the deficit in the second half of June and another price rise, as per ICIS-MRC Price Report.
The second half of June was quite difficult in the Russian HDPE market. Unscheduled outage at Stavrolen in the early month and the absence of the supply from Nizchnekamskneftekhim resulted in the deficit of the material. Amid the shortage of supply, HDPE prices on some grades exceeded Rb100,0000/tonne, the rush continued to be seen in the market.
Nizchnekamskneftekhim switched to the production of linear polyethelene (LLDPE) in May. The producer's clients said that the company would proceed with LLDPE production minimum to 15, July. Starolen had to shut its HDPE production in the late May - early August because of the problems with ethylene. Stock inventories at the producers and traders were low.
All these factors with seasonally increased demand led to the deficit in the market. The producers of film HDPE were the first who felt the tight supply in the market. Some companies said they had to buy feedstock at Rb99,000/tonne FCA, including VAT. The deficit has also affected the market of blow moulding PE, and this week there was reported a significant shortage of injection moulding HDPE.
Because of the sharp deficit of HDPE in the domestic market some Russian producers had to cut exports volumes in July. In particular, there was information about reduced export volumes from Stavrolen. Market participants said HDPE supply is unlikely to improve until mid-July, when Nizchnekamskneftekhim resumes its production. HDPE shortage in June led to a price rise in July contacts.