MOSCOW (MRC) -- The Russian linear low density polyethylene (LLDPE) market remained the fastest growing market, demand for this polyethylene (PE) has almost doubled for the past nine years. In 2019, the main increase in demand for LLDPE was provided by manufacturers of film products, according to MRC's Annual report.
The year of 2019 was a successful one for Russian LLDPE consumers over the past few years. Domestic producers significantly increased their output, including that on metallocene catalysts, thereby reducing dependence on foreign suppliers. And LLDPE prices fell by more than Rb15,000/tonne in the second half of last year under pressure from the situation in foreign markets. Traditionally, in recent years, the main increase in demand for LLDPE has been provided by manufacturers of film products, but in 2019, demand from producers of large-sized items and cable and wiring products also increased.
Nizhnekamskneftekhim became the key LLDPE supplier to the Russian market last year, the Tatarstan producer managed to increase its output of this PE grade by 17%, reducing the dependence of local consumers on imports from the United States and the Middle East.
Also, another Tatarstan producer - Kazanorgsintez - significantly increased its share of LLDPE in PE production, including that on metallocene catalysts, in 2019. And in November 2019, ZapSibNeftekhim launched its own LLDPE production with a capacity of 700,000 tonnes per year.
Thus, Russia's overall LLDPE production rose to 254,000 tonnes from 175,400 tonnes in 2018. At the same time, imports decreased less significantly - from 183,400 tonnes in 2018 to 180,900 tonnes last year. And overall LLDPE production capacities in Russia exceeded 1,000,000 tonnes per year as of 1 January, 2020.
Prices of butene LLDPE were in the range of Rb91,000-93,000/tonne CPT Moscow, including VAT, in the Russian market in January 2019. Prices of Middle Eastern PE reached Rb98,000/tonne CPT Moscow, including VAT, in late May. But already in June, a gradual decrease in LLDPE C4 prices began partially because of a similar situation in the global markets, which lasted until the end of the year. Some sellers' LLDPE prices had reached Rb77,000/tonne CPT Moscow, including VAT, by December.
Films producers were the main driver of last year's demand for LLDPE, demand for film grade LLDPE exceeded 362,000 tonnes last year, showing more than a double growth over the past nine years. Stretch films producers were the key LLDPE consumers.
Large-seized items producers by rotational moulding was the second largest LLDPE consumption segment. Last year's demand for PE in this segment exceeded 18,000 tonnes.
Compounds and masterbatch producers closed the top three manufacturers.
A major increase in LLDPE production in Russia, along with a proportional rise in exports, is expected in 2020.
MRC