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June prices of some LDPE grades rise significantly in Russia

July 01/2020

MOSCOW (Market Report) -- Demand for low density polyethylene (LDPE) increased significantly in the Russian market in June partially because of seasonal factors. And already in the second half of the month, some polyethylene (PE) grades became scarce and rose in price substatially, according to ICIS-MRC Price report.

Quarantine restrictions due to the coronavirus pandemic in April - May led to a major reduction in demand for LDPE. But already in June, the situation changed dramatically, demand for PE began to recover gradually, whereas supply of some grades was dynamically reduced due to upcoming shutdowns for maintenance at several plants simultaneously. As a result, 108 grade PE had become scarce by end-June, and some sellers" prices rose by Rb13,000/tonne.

PE, namely 108 grade PE, was in high demand at its lower price range. Demand was affected by converters" desire to build up additional LDPE inventories before shutdowns for turnarounds at several plants. Demand was also pressured by the end of the quarter and the need to "spend" VAT.

Angarsk Polymers Plant shut its production capacities for a 30-day turnaround on 22 June. A similar shutdown for a scheduled maintenance is expected at Gazprom neftekhim Salavat"s LDPE production capacities from 1 July. And in the second half of July, Tomskneftekhim will take off-stream its production for a two-week turnaround.

Amid stronger demand and shutdowns for maintenance at several plants, supply of 108 grade LDPE began to decrease dynamically already in the second decade of June, while some sellers had sold out all their quantities by the middle of the month. And as supply of PE subsided, prices went up.

Tight supply and stronger demand led to price records last week. Deals for July shipments of Kazanorgsintez"s 108 grade LDPE exceeded Rb72,000/tonne FCA Kzan, including VAT, in the electronic trades.

The completely opposite situation was in the 158 grade and 153 grade LDPE markets in June. There was no shortage of PE in the market, despite restrictions on shipments from Kazanorgsintez and the upcoming shutdowns at the plants in Salavat and Tomsk. PE prices of some sellers, including the Belarusian producer rose, but the price increase was not as significant as in the 108 grade LDPE segment. 


mrcplast.com
Author:Margaret Volkova
Tags:PE, LDPE, Gazprom neftekhim Salavat, Tomskneftekhim, Angarsk Polymers Plant, Kazanorgsintez, Rossiya.
Category:General News
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