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LDPE supply fell in the Russian market due to issues at some plants

April 15/2019

MOSCOW (MRC) -- Russian consumers faced a tight supply of low density polyethylene (LDPE) last week, with several producers simultaneously reducing their shipments. There has been no great rush in the market yet, but some sellers raised their prices, according to ICIS-MRC Price report.

Restrictions on shipments of some LDPE grades by a number of Russian producers began a week earlier, but this trend intensified last week. Negativity was added by the fact that restrictions were imposed on road freight transportation for movement on regional roads  in a number of regions, which led to certain delivery problems and higher delivery costs. At the same time, there has been no big excitement in the LDPE market so far because of temporary tight supply. Sellers were trying to raise prices, but buyers resisted any growth.

Angarsk Polymers Plant restricted its LDPE shipments to the domestic market a week earlier. The plant"s customers said supply restrictions were caused by export contracts, and an increase in supply of polyethylene (PE) for shipments to the domestic market can be expected not earlier than in the middle of this week.

Ufaorgsintez had problems at its ethylene unit last week, leading to lower capacity utilisation and reduction in shipments of 108 grade LDPE. The plant also shipped material for export. But the main problem was the fact that trucks had been loaded by no more than 10 tonnes per truck since 1 April. And this factor significantly reduced the rate of PE shipments to customers.

Gazprom neftekhim Salavat also had issues at its LDPE production this week, which caused a temporary decrease in  supply of PE in the domestic market.

Kazanorgsintez, Russia"s second largest LDPE producer, shut down some of its production capacities for a long turnaround on 10 April. 108 grade LDPE was also shipped to the domestic market, partially due to the fulfilment of export contracts.

Consumer activity has been low in the LDPE market since early April, but tight supply still affected prices. The price rise has been insignificant so far and in some cases, it did not exceed Rb1,000-1,500tonne in comparison with the level as of the second half of March. Even amid the shortage, buyers continued to resist any price increase.
Author:Margaret Volkova
Tags:PE, LDPE, Gazprom neftekhim Salavat, Angarsk Polymers Plant, Kazanorgsintez, Russia.
Category:General News
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