Russian market faced a shortage of natural pipe grade PE in late August
MOSCOW (MRC)--High seasonal demand and long-term restrictions on production of pipe-grade high density polyethylene (HDPE) for key producers led to higher prices and tighter supply in the second half of August, according to ICIS-MRC Price Report.
Two Russian producers reduced production of natural pipe grade HDPE in the summer months, despite strong seasonal demand for polyethylene (PE).
Constricted supply has been aggravated by turnarounds and upcoming maintenances at Russia’s two largest HDPE plants - Stavrolen and Kazanorgsintez – on the horizon.
Key Russian natural pipe grade HDPE supplier Gazprom neftekhim Salavat shut production capacities for a one-month turnaround in July.
The Bashkir plant suffered a severe delay to scheduled maintenance works and intends to focus on production of injection molding PE from mid-September.
Although Stavrolen resumed works in the second half of June, production of this PE grade has been discontinued since 12 July due to technical issues. The production of new material is planned in late October following turnaround.
Kazanorgsintez also reduced output of natural pipe HDPE in July-August 2019 in favour of another PE grade and the Kazan manufacturer intends to start a gradual shutdown of its production capacities for almost 30-day maintenance on 14 September.
Despite the shortage most converters managed to meet their needs for material. Consumers partially switched to purchasing grades of HDPE with similar in properties but a price rise could not be avoided.
Small quantities of Salavat natural pipe grade HDPE were sold at Rb106,000-108,000/tonne carriage paid to (CPT) Moscow, including VAT, last week.
Some sellers offer prices for the Kazan similar material reached Rb110,500/tonne CPT Moscow, including VAT, but there was no information about deals done at such prices.
MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan