MOSCOW (MRC) -- The end of the maintenance period at the largest plants and a seasonal decrease in demand led to a reduction in high density polyethylene (HDPE) prices in the Russian market in the second half of October, according to ICIS-MRC Price report.
September and the first half of October is traditionally a period of peak HDPE prices in the Russian market. This year was no exception, scheduled shutdowns for turnarounds at the two largest producers and strong demand in the first month of autumn led to a record increase in HDPE prices. As expected, prices began to gradually roll back in the second half of October.
Kazanorgsintez, Russia's largest HDPE producer, was the first to shut its production capacities for scheduled maintenance, the turnaround started on 26 September and lasted slightly less than one month. Stavrolen, Russa's second largest producer, took off-stream its production for 10 days on 1 October.
In order to compensate for the temporary outage at the two largest manufacturers, Nizhnekamskneftekhim switched to HDPE production in the third decade of September. But this factor did not help to balance the market situation.
By mid-September, prices for a number of HDPE grades had reached their peak. Thus, in a number of cases, deals for film grade polyethylene (PE) reached Rb118,000/tonne FCA, including VAT, and higher. Prices of black PE 100 reached Rb124,000/tonne FCA, including VAT.
High prices, to which it was difficult for some converters to adapt, and seasonal factors began to put pressure on demand in the second half of September. Demand continued to subside in the first half of October, with some converters deliberately limiting their purchases, waiting for prices to fall with the launch of two plants after the turnarounds.
Prices of imported HDPE accounted for the greatest reduction last week. Thus, prices of Uzbek film grade and blow moulding PE dropped to Rb109,000-111,000/tonne FCA, including VAT, and Rb108,000-109,000/tonne FCA, including VAT, respectively.
Restrictions on shipments of certain HDPE grades from some producers remained, but they were not critical for the market.
MRC