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Russian LDPE market: 2020 year results

December 30/2020

MOSCOW (MRC) -- Demand for low density polyethylene (LDPE) subsided in Russia in 2020 by 2% after an increase a year earlier. At the same time, prices have reached a record level over the past five years and continued to rise, according to ICIS-MRC Price report.

Quarantine restrictions in April-May led to a significant reduction in demand for LDPE in Russia, despite seasonal factors. But already from mid-summer, processing volumes began to recover dynamically and remained at a good level until the end of the year. However, according to preliminary results, demand for LDPE showed a negative result in 2020. At the same time, the dynamically growing polyethylene (PE) prices in Asia have begun to put a major pressure on prices in the Russian market for the past two months of the year, and already in December, prices of Russian LDPE exceeded Rb100,000/tonne.

Russian producers failed to maintain last year"s LDPE production figures. LDPE output totalled 574,600 tonnes in the first eleven months of 2020, down by 2% year on year. And lower PE production was largely due to the increase in the time of shutdowns for repairs at some plants.

Exports grew only by 1% to 171,700 tonnes. At the same time, export volumes were quite high in the first quarter, after which Russian producers reduced their sales to foreign markets. Higher exports was also registered in the past two years because of high prices in Asia.

LDPE imports to the Russian market increased. Overall PE imports exceeded 103,400 tonnes in January-November 2020, up by 5% year on year. At the same time, imports grew from both Belarus and Europe.

Thus, demand for LDPE was 506,320 tonnes in the first eleven months of 2020 versus 514,500 tonnes a year earlier.

All five producers shut their production capacities for scheduled maintenances this year. Traditionally, Angarsk Polymers Plant and Gazprom neftekhim Salavat shut their production in July-August.  For a number of reasons, Kazanorgsintez took off-stream its production capacities twice this year: in April-May and September-October.

LDPE prices reached their lowest level in the second half of May-early June, and prices of some grades fell below Rb70,000/tonne CPT Moscow, including VAT. But already in the second half of the first month of summer, PE prices began to go up, which was due to the upcoming shutdowns for turnarounds at plants in Angarsk and Salavat. In September, LDPE prices exceeded Rb100,000/tonne CPT Moscow, including VAT, and after a slight decrease in October, prices resumed their upward trend in November under the pressure of the dynamic price growth in Asia.

Thus, December LDPE prices exceeded Rb102,000/tonne CPT Moscow, including VAT, breaking the 2016 year record. And some producers have already announced a further increase in January LDPE prices.

Author:Margaret Volkova
Tags:PE, LDPE, Gazprom neftekhim Salavat, Angarsk Polymers Plant, Kazanorgsintez, Russia.
Category:General News
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