MOSCOW (MRC) -- There has been stronger demand in the Russian polypropylene (PP) market since early March, while supply has been gradually subsiding. Prices have been going up for the second week in a row, according to ICIS-MRC Price report.
A prolonged period of oversupply and lower PP prices was registered in the first two months of the year. But already in late February, the need for PP began to grow gradually, and, as a result, some sellers began to raise their prices. In the second week of March, the increased demand was spurred by such factors, as a major weakening of the rouble exchange rate against the dollar, limited stocks of some sellers and rhw upcoming road closures. Prices of propylene homopolymer (homopolymer PP) went up by Rb1,000-2,000/tonne last week.
Homopolymer PP raffia was in high demand last week, and many buyers reported a shortage of both domestic and imported material in the market.
Consumers divided into three groups last week. The first group attempted to build up additional PP inventories amid fears of further price increases on the back of the rouble weakening. The second group of buyers tried to assess the current situation with supply and possible price options for the near future. And only a small part of consumers did not react to the situation.
Some sellers limited their sales of homopolymer PP last week, realizing that the potential for price growth will remain in the coming weeks. Other sellers said they had already sold out their March PP quotas.
The other day, SIBUR Tobolsk, Russia's largest PP producer, should shut down or already took off-stream its production capacities for a long scheduled maintenance. The plant's representatives did not officially comment on the timing of the outage. According to unofficial information, the shutdown will last for 45 days. The plant's annual production capacity is 500,000 tonnes.
Demand was pressured by the factor of restrictions on ruck transportation in certain regions. Market participants said restrictions on freight road transportation will be introduced in Bashkortostan (Ufaorgsintez) on 23 March. Restrictions in Tatarstan will come in force on 1 April.
Some sellers restricted their PP sales last week, spot prices grew by Rb1,000-2,000/tonne for homopolymer PP. Prices of homopolymer PP raffia had risen to Rb84,000-84,500/tonne FCA, including VAT, by the end of last week.
MRC