HDPE prices began to rise in Russia after a long period of price cuts

MOSCOW (MRC) - Prices of high density polyethylene (HDPE) have been going down over the last nine months in Russia due to excess supply. Situation improved in July; some grades of HDPE prices began to rise gradually, according to ICIS-MRC Price Report.

Russian HDPE prices began to decrease in October last year mostly because of a significant surge in imports. The surplus had significantly affected PE prices for nine consecutive months until June, when HDPE prices fell to the level of 2014. But situation began to change in July also because of a significant increase in the cost of polyethylene in foreign markets. The black pipe grade HDPE showed the greatest price increase.

The devaluation of the rouble and a serious decrease in price in the Russian market led to a significant drop in HDPE imports. So, external deliveries of polyethylene decreased by a third in Q2 compared to the average in 2019 and did not exceed 21,000 tonnes on average per month, while in June, the import indicator fell below 19,000 tonnes.
Prices have been stable since May in the markets of Europe, Asia and Turkey; HDPE prices increased by USD100-220/tonne, depending on the region.

Depreciation of the rouble against the dollar in July made exports even more attractive to Russian producers.
Some producers increased export sales in July. The reduction in imports, the growth in exports and the seasonal increase in demand in July made it possible to balance the Russian market for many HDPE grades, and there was even a shortage for some positions.

The tightest supply was felt in the pipe HDPE segment, some Russian producers have reduced the supply of polyethylene to the domestic market in favour of export. There were also problems with the purchase of black PE100 in foreign markets.

Russian black PE100 prices increased to Rb85,500/tonne CPT Moscow, including VAT and above. Supply of HDPE for extrusion blow moulding (ЕВМ) of large containers has been tight since the second half of June. There were interruptions in supplies from domestic manufacturers, and imports have also declined.

Prices of imported analogues reached Rb73,000/tonne CPT Moscow, including VAT. The HDPE film market was relatively balanced in terms of supply and demand. Last week, some sellers increased prices, although the price surge was quite modest and amounted to about Rb1,000/tonne. But taking into account the export alternative, producers still hope in the near future to achieve a more noticeable increase in prices.
MRC

MOSCOW (MRC) -- Celanese Corporation, a global specialty materials company, has increased July list and off-list selling prices for Vinyl Acetate Monomer (VAM) sold in China, as per the company's press release.

The price increase is effective for orders shipped on or after 8 July, 2020, or as contracts otherwise allow, and is incremental to any previously announced increases.

Thus, July VAM prices rose for the Chinese region by RMB300/mt.

As MRC reported earlier, the company last raised its VAM prices for China on 1 July, 2020, by RMB700/mt.

According to MRC's DataScope report, April EVA imports to Russia dropped by 5,85% year on year to 3,050 tonnes from 3,250 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation increased in January-April 2020 by 1,55% year on year to 12,540 tonnes (12,350 tonnes a year earlier).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
MRC

MOSCOW (MRC) -- MEGlobal has announced its Asian Contract Price (ACP) for monoethylene glycol (MEG) to be shipped in August 2020, according to the company's press release.

Thus, on 13 July the company said ACP for MEG will be at USD590/MT CFR Asian main ports for arrival in August 2020, which corresponds to the level of July.

The August 2020 ACP reflects the short term supply/demand situation in the Asian market.

As MRC reported earlier, MEGlobal announced its July ACP for MEG at USD590/MT CFR Asian main ports, up by USD20/tonne from June.

MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).

According to ICIS-MRC Price report, in Russia, July formulae prices for contract customers were in the range of Rb65,000-67,500/tonne CPT Moscow, including VAT. Prices of material in the spot market remained steady last week, Russian producers continued to ship material from 20 tonnes at a price of Rb70,000-72,000/tonne CPT Moscow, including VAT.

MEGlobal is a fully integrated supplier of monoethylene glycol (MEG) and diethylene glycol (DEG), collectively known as ethylene glycol (EG).
MRC

MOSCOW (MRC) -- Taiwan’s Formosa Petrochemical Corp has shut a residue desulphurises (RDS) unit at its 540,000 barrels-per-day (bpd) Mailiao refinery after it was hit by a fire early on Wednesday, reported Reuters with reference to three sources close to the matter.

Mailiao is one of Asia’s 10 largest standalone refining plants. The sources said its no. 2 RDS, with a capacity of 80,000 bpd, had been affected by the fire.

Formosa spokesmen could not immediately be reached for comment.

Trade sources said the outage would hit output of low-sulphur residual fuels used either in blending, to make very low sulphur fuel oil (VLSFO) for bunkering, or fed into other secondary units for gasoline or gasoil production.

Formosa cut VLSFO exports this month as it stepped up production of gasoline and gasoil on improving margins, while VLSFO profits weakened, the sources added.

The unit had been restarted in May after completing maintenance.

The company also operates three crackers in Mailiao with a combined 2.935m tonne/year capacity, which are operating normally, market sources said.

As MRC informed earlier, Formosa Petrochemical plans to shut down its No.3 cracker in Taiwan for maintenance in mid-August, 2020. The 1.2-MMt/y No. 3 cracker is due to be offline until end-September.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

MOSCOW (MRC) -- Solenis says it has acquired Poliquimicos S.A. de C.V. (Mexico City, Mexico), a maker of water treatment chemicals for the Mexican market, said Chemweek.

Terms of the transaction, including purchase price, were not disclosed. Poliquimicos makes chemicals for customers in pulp and paper and other water-intensive industries.

"The acquisition of Poliquimicos will enhance Solenis’ direct sales channel in the Mexican market and improve our production capabilities in the region,” says Solenis CEO John Panichella. The location of the Poliquimicos production facility outside Mexico City, as well as the company’s position in the packaging market, give the acquisition further benefits for Solenis, according to Jose Armando Pinon Aguirre, vice president/Latin America at Solenis.

As MRC informed earlier, Solenis (Wilmington, Delaware) says it has signed an exclusive distribution agreement with Peter Greven (Euskirchen, Germany), a leading manufacturer of oleochemical additives. Under the terms of the agreement, Solenis will be the authorized distributor for Peter Greven's calcium stearate dispersions for paper coating applications in the EU, UK, and Russia.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC