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PP prices reached another historical record in Russia at the end of March

April 01/2021

MOSCOW (MRC) - The shortage of polypropylene (PP) in several regions of the world has become the main reason for the rapid rise in prices since the beginning of the year. The Russian market did not stand aside, and in February - March, local converters faced an unprecedented rise in prices. By the end of March, prices reached another record, with some sellers announcing further increase for April shipment, according to the ICIS-MRC Price Report.

PP prices grew dynamically in the markets of Latin America, Europe and Turkey, and at the same time, export prices for Russian producers also grew. As a result, under the pressure of the export alternative and limited supply from a number of suppliers, PP prices began to rise in the Russian market as well.

In the late March prices of homopolymer PP in Russia increased by more than 50% since the beginning of the year, setting new historical records. The export prices of Russian producers exceeded the prices in the domestic market in February - March.

So, depending on the direction of export, export deals in the first month of spring were in the range of USD1,840-2,130/tonne FCA, for homopolymer PP. And only by the end of March, domestic prices of polypropylene in Russia approached export parity for certain regions, while prices stabilised in some export markets. It was very difficult for Russian converters during February - March to pass the new polypropylene price to the cost of finished products.
The processes of renegotiating the prices of finished products were very painful, especially with retail chains.

Because of this the market was divided into three parts. The first group reduced purchases due to difficulties in passing new PP prices to finished products, there were cases of complete suspension of work. The second group of companies, despite record price levels, has good demand for finished products and is ready to accept higher prices in order to fully fulfill obligations to their customers.

The third group of buyers does not have an increased demand for finished products and is ready to put up with low capacity utilisation. Spot offers for the supply of homopolymer PP raffia in the first days of February started at Rb113,500/tonne CPT Moscow, including VAT, whereas at the end of March the cost of this PP from some sellers exceeded the level of Rb170,000/tonne CPT Moscow, including VAT.

A similar situation was with other types of polypropylene. Last week, price discussions started regarding April supplies of polypropylene, with some sellers discussing further price increases. Deals of propylene copolymers were discussed above Rb200,000/tonne CPT Moscow, including VAT.
Author:Anna Larionova
Tags:CIS, PP, PP block copolymer, homopolymer PP, PP random copolymer, propylene.
Category:General News
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