Demand for PC granules blow moulding in Russia continues to fall

MOSCOW (MRC) - Consumption of polycarbonate (PC) for blowing bottles in Russia decreased to 2,200 tonnes in the first nine months, down 11% year on year, according to MRC DataScope report.

Asian material occurred for the biggest share of blow moulding PC consumption in Russia. The current situation in the Asian PC market is that producers faced with critical low margins due to the rising cost of feedstock. In this regard, they had to raise prices for the domestic and foreign market.

Despite the gradual decrease in the feedstock prices (acetone, Bisphenol, phenol) in October, producers have not covered previously incurred losses. At the beginning of October, prices of shipments at the ports of China were as follows: acetone - USD1,060-1,070/tonne, phenol - USD1,480-1,560/tonne, Bisphenol A - USD1,900-1,980/tonne. Prices for PC remained steady in the range of USD2,550-2,750/tonne, CIF China.

Domestic prices for Asian PC in Russia continued to rise on the rouble devaluation. In the ports of the Russian Federation in the East PC prices were heard in the range of USD2,730-USD2,770/tonne, excluding VAT. Converters reported a significant decrease in margins and were going to reduce PC consumption in the end of the year.

Given the current market trend Russia's PC consumption is likely to continue to shrink next year.
MRC

MOSCOW (MRC) - Ukraine's imports of suspension polyvinyl chloride (SPVC) in Ukraine decreased to 88,800 tonnes in the first nine months of this year, up 18% year on year. Decline in SPVC imports was seen in all regions, according to MRC DataScope report.

September imports of SPVC in Ukraine increased to 12,000 tonnes, compared with 10,700 tonnes in August. Total SPVC imports in the country were 88,800 tonnes in January - September 2014, compared with 108,900 tonnes in the same time a year earlier. Reduction in demand in all sectors of consumption has led to a decline in imports, with the largest reduction occurred for European SPVC.

Structure of PVC imports in Ukraine over the reported period was as follows. September imports of US PVC in Ukraine remained steady from the August level at 7,600 tonnes. Total imports of US PVC in the country decreased to 53,300 tonnes in the first nine months of this year, compared with 56,800 tonnes in the same time a year earlier. The relatively low level of export prices for the North American material and free exports resulted in a small reduction in sales volume in comparison with other regions.

September imports of European PVC in Ukraine increased to 4,400 tonnes, compared with 3,500 tonnes in August. Total imports of European PVC in the country were 34,800 tonnes in January - September 2014, compared with 49,300 tonnes year on year.

Key suppliers of SPVC in the Ukrainian market because of the geographical factors were the producers from Hungary, Poland, Germany and the Czech Republic.

PVC from other regions (Asia, Turkey, Russia) was delivered irregularly.


MRC

MOSCOW (MRC) - Ukraine' s imports of polycarbonate (PC) grew 3,300 tonnes in the first nine months of 2014, up 9% year on year, according to MRC DataScope report.

The biggest increase was seen in the extrusion sector, reaching 710 tonnes over the reported period, up 51% year on year. The only PC sheets producer in Ukraine is the company Tagol (Dnepropetrovsk). The increase in demand for Ukrainian products resulted from a reduced consumption of Russian PC.

Imports of extrusion PC has seasonally decreased since September on the back of poorer demand for PC sheets. Imports of injection moulding PC in Ukraine remained steady at 1,500 tonnes over the reported period, compared with the same time a year earlier. Converters in this segment are oriented to the domestic market as well as on external supplies.
One of the markets that consumes Ukrainian injection moulded PC was Russian market. Most converters said they had kept the volume of shipments to Russia at the pre-crisis level.

Consumption blow moulding PC in Ukraine has increased to 570 tonnes in the first nine months of the year, up 36% year on year. There two Ukrainian producers of PC bottles for water: Tagol and Graif-Ukraine.

Ukrainian market of polycarbonate is completely dependent on external supplies. European PC occurred for the biggest share of imports in the country.
MRC

MOSCOW (MRC) -- Imports of high density polyethylene (HDPE) to the Russian market dropped by 2% over the first nine months of 2014. Scheduled outage for maintenance of Russian producers in September led to a substantial increase in imports, according to MRC DataScope report.

As expected, September HDPE imports to Russia grew to record levels over the past two years and totalled 41,500 tonnes on the back of the scheduled shutdowns for maintenance works at Kazanorgsintez and Nizhnekamskneftekchim. The overall imports of this polyethylene (PE) grade into Russia decreased to 223,900 tonnes from January to September 2014 versus 228,200 tonnes a year earlier.

The structure of imports by consumption sectors looks the following way over the stated period.

Last month's imports of pipe grade HDPE increased to 14,500 tonnes from 8,800 tonnes in August on strong seasonal demand and scheduled shutdowns for maintenance at Russian plants. The overall pipe grade PE imports into Russia reached 65,800 tonnes over the first nine months of 2014, up by 17% year on year.

September HDPE imports for extrusion coating of large-diameter steel pipes virtually rose to 4,700 tonnes from 3,100 tonnes a month earlier. PE imports to this processing sector fell by 25% over the said period and reached 43,500 tonnes.

Imports of injection moulding HDPE rose slightly last month to 3,700 tonnes from 3,100 tonnes in August because of supplies from Uzbekistan. Imports of this HDPE grade into Russia dropped by 2% over the first nine months of 2014 to about 36,100 tonnes.

September imports of blow moulding HDPE increased almost twice from August up to 9,700 tonnes on the back of the absence of shipments from Russian producers. The overall imports of this PE grade rose by 35% from January to September 2014 to 39,200 tonnes.

Seasonal factors and scheduled outages for maintenance also led to an increase in film grade HDPE imports last month up to 7,600 tonnes (5,900 tonnes in August). Imports of film grade PE were 29,600 tonnes over the said period, down by 21% year on year.

HDPE imports into the other consumption sectors (cable extrusion, rotational moulding, etc.) fell to 9,700 tonnes from 11,200 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Imports of polycarbonate (PC) to the Russian market decreased over the first nine months of 2014 by 10% year on year and amounted to 32.5 thousand. Tons, according to DataScope report.

At the same time, imports for extrusion segment dropped by 6% year on year and totalled 20,800 tonnes. PC imports for sheet extrusion accounts for 64% of the total PC imports over the first three quarters of 2014.

One of the reasons for weaker demand for imported PC is higher prices of polymer in the domestic market because of the rouble devaluation. Given the increased cost of products, converters are in no position to reach the minimum target margin or even overcome the break-even point. Market players said this was mostly important for small converters. In such a situation, they either shut down operations or switched to Russian material.

Also an important factor is that most suppliers of imported PC only work on prepayment basis. Many market players are experiencing a shortage of working capital to make prepayment because of the worsening of the general economic situation in Russia. Prepayment terms may be up to 50 days in case when it comes to shipments from the Asian region.

Meanwhile, Kazanorgsintez, Russia's only PC producer, has aimed at imports substitution in the extrusion market. Russian polymer is offered at more attractive price and terms in the market than imported products.

However, consumers may face higher prices for domestic PC starting form November, which will be caused by the necessity to cover the increased feedstock costs. The probability of introduction of the import duty on benzene in late 2014 also puts pressure. Benzene is a basic feedstock in the synthesis process of both PC and many other polymers.

MRC